Intel Slides as Foundry Business Loss Spotlights Wide Gap with Rival TSMC

The logo for the Intel Corporation is seen on a sign outside the Fab 42 microprocessor manufacturing site in Chandler, Arizona, US, October 2, 2020. (Reuters)
The logo for the Intel Corporation is seen on a sign outside the Fab 42 microprocessor manufacturing site in Chandler, Arizona, US, October 2, 2020. (Reuters)
TT

Intel Slides as Foundry Business Loss Spotlights Wide Gap with Rival TSMC

The logo for the Intel Corporation is seen on a sign outside the Fab 42 microprocessor manufacturing site in Chandler, Arizona, US, October 2, 2020. (Reuters)
The logo for the Intel Corporation is seen on a sign outside the Fab 42 microprocessor manufacturing site in Chandler, Arizona, US, October 2, 2020. (Reuters)

Intel shares fell nearly 7% on Wednesday, as ballooning losses at its contract chip-making business signaled the company could take years to catch up with the profitability of rival Taiwan Semiconductor Manufacturing Co.

Disclosing new financials details for its foundry unit on late Tuesday, Intel said the business posted operating losses of $7 billion in 2023 compared with $5.2 billion in 2022.

"We expected foundry economics to be bad, and they truly are," said Bernstein analyst Stacy Rasgon. "We likely have several years of substantial headwinds still in front of us."

Intel is set to lose more than $12 billion in market value if the losses hold.

The company has been spending billions of dollars to return as the dominant maker of cutting-edge chips, a position that it lost to Taiwan Semiconductor Manufacturing Co., which is now the world's biggest contract chipmaker.

The US chipmaker's capital investments classified as "construction in progress" totaled $43.4 billion as of Dec. 30, 2023, compared with $36.7 billion a year earlier.

Intel also plans to spend $100 billion on plants across four states in the United States, in part helped by funding from the US Chips Act.

CEO Pat Gelsinger said operating losses for its contract chip-making business would peak in 2024 before breaking even by about 2027. It accounted for about 35% of Intel's total net revenue in 2023.

Intel expects the foundry business to have a gross margin of about 40% by 2030, which would still trail the 53% margin TSMC reported for the fourth quarter of 2023.

At T$625.5 billion ($19.52 billion) in just the final three months of the 2023, TSMC's revenue is also much larger than the $18.9 billion in sales Intel's foundry unit had in 2023.

"The incumbents' geographic and talent advantages, as well as their established rolodex of tier-1 customers, have jolted investor confidence in Intel's foundry prospects," said Parv Sharma, a senior analyst at research firm Counterpoint.



KFSHRC Performs World’s First Robotic-Assisted BiVAD Implantation

The procedure was meticulously planned and benefited from 3D imaging technologies - SPA
The procedure was meticulously planned and benefited from 3D imaging technologies - SPA
TT

KFSHRC Performs World’s First Robotic-Assisted BiVAD Implantation

The procedure was meticulously planned and benefited from 3D imaging technologies - SPA
The procedure was meticulously planned and benefited from 3D imaging technologies - SPA

‏King Faisal Specialist Hospital and Research Center (KFSHRC) in Riyadh has performed the world’s first implantation of two artificial pumps for biventricular support (BiVAD-HMIII) using robotic technology on a patient with advanced heart failure.

According to a press release, this groundbreaking procedure opens new horizons in circulatory support techniques for patients with complex cardiac conditions, marking a significant medical achievement that culminated in the patient’s recovery within a short period following the surgery.

‏The procedure represents a major advancement in the treatment of bilateral heart failure, which was traditionally performed through full sternotomy, an approach associated with higher surgical risks and prolonged recovery.

The cardiac surgery team at KFSHRC, led by Prof. Feras Khaliel, successfully performed the operation through small incisions using remotely controlled high-precision robotic arms, resulting in reduced blood loss, lower risk of infection, and faster patient recovery.

The procedure was meticulously planned and benefited from 3D imaging technologies, real-time surgical navigation, and innovative solutions for safely securing the mechanical assist devices, added the release.

‏KFSHRC aims to publish the results of this procedure in peer-reviewed medical journals and present them at global cardiology conferences to promote knowledge exchange and establish innovative partnerships with leading international centers in robotic care and advanced heart failure management.

According to SPA, these milestones serve as evidence of its leadership in adopting cutting-edge cardiac technologies and managing critical conditions with the highest standards of precision and safety, further reinforcing its position as a leading academic medical center both regionally and globally.