Intel will continue to lose money on its foundry business in 2024

Intel will continue to lose money on its foundry business in 2024

“2024 is the trough for foundry operating losses,” he said in comments to investors after Intel’s earnings announcement Tuesday. “We’ve committed to being the number-two foundry by the end of the decade. And between now and then, we’ll hit breakeven operating margin about midway through that and then driving operating margin improvement through the period.”

Gelsinger cited two major factors for Intel’s continued difficulties: the decline in sales of PCs using Intel chips following the boost in purchases during the COVID-19 pandemic, and the company’s small share of the market for chips to accelerate the training of AI models.

“We also expected that we would have been more successful with our accelerator share gains and where we would be by this point in time,” he said. “So those would be, I say, the two biggest headwinds that weren’t accounted for before.”

Cautious optimism on future of foundry

However, Gelsinger was cautiously optimistic about the foundation Intel is building to drive manufacturing earnings growth as it repositions its foundry business for manufacturing not only its own chips, but also chips for other companies.

“We’ve tried to take very reasonable, modest assumptions for our core business where we’re sort of in the core area, in the mid- to low single digits growth rate,” he told investors and analysts. “Additionally, some improvements or additional revenue growth for our foundry business that we’re seeing as we look over that cycle as well, leading us to the mid- to upper single digits for an aggregate growth rate in the modeling that we’ve seen here.”

Intel’s long-time chip rival AMD spun off its chip-manufacturing business as GlobalFoundries in 2009, and sold the last of its stake in 2012.

administrator

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *