2023 proved challenging for Intel’s chip-making division. They reported a hefty $7 billion operating loss, a significant increase from the previous year’s $5.2 billion. Revenue also took a hit, dropping 31% to $18.9 billion compared to 2022.
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CEO Pat Gelsinger acknowledges some of the blame falls on past missteps. These decisions led to outsourcing 30% of Intel’s wafer production to competitors like TSMC, a major blow.
There’s a light at the end of the tunnel, though. Intel has finally invested in EUV (extreme ultraviolet) machines from ASML, a technology they previously opted out of. Gelsinger believes this cost-effective solution will propel them towards breaking even by 2027. ASML’s website further strengthens this claim, highlighting how EUV facilitates more affordable mass production for chip foundries.
Intel seems serious about this turnaround. They’ve committed a staggering $100 billion to building and expanding chip foundries across four states. Additionally, the CHIPS Act provides a welcome boost with up to $8.5 billion in government funding.
However, success hinges on attracting clients for their chipmaking services. While Microsoft’s recent partnership offers some hope, the number of companies needed for profitability by 2027 remains unclear.
Overall, Intel is at a crossroads. Will their investments in EUV technology and foundry expansion, coupled with government support, be enough to overcome past mistakes and secure a profitable future? Only time will tell.
