Intel reported significant losses for its Intel Foundry chip unit in 2023, with a loss of $7 billion, which added to a loss of $5.2 billion the previous year. Despite a 31% year-over-year drop in revenue to $18.9 billion compared to $27.49 billion in 2022, the company announced plans to invest $100 billion in chip factories in four U.S. States.

The U.S. is looking to grow its domestic semiconductor business, and Intel’s U.S. foundry plans have helped the company secure nearly $20 billion in CHIPS and Science Act funding. CEO Pat Gelsinger expressed optimism about the future of Intel Foundry, although he expects more losses in 2024 and predicts the unit may not break even until 2030.

Intel previously reported that Microsoft would use its foundry services and contribute $15 billion in revenue, but these assurances did not prevent Intel shares from falling 5% during trading on Wednesday. The company still has a long way to go to catch up with semiconductor leader Taiwan Semiconductor Manufacturing (TSMC), whose sales are expected to increase 20% in 2024 to $83.4 billion.

Gelsinger attributed the decline in revenue to past missteps, including a decision not to invest in extreme ultraviolet (EUV) machines from Dutch firm ASML. He said Intel now buys about 30% of its silicon wafers and stressed the importance of improving EUV capabilities to increase production in-house

By Samantha Johnson

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