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)
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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.



Sam Altman Says Meta Offered $100 Million Bonuses to OpenAI Employees 

The logo of Meta is seen at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 11, 2025. (Reuters) 
The logo of Meta is seen at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 11, 2025. (Reuters) 
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Sam Altman Says Meta Offered $100 Million Bonuses to OpenAI Employees 

The logo of Meta is seen at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 11, 2025. (Reuters) 
The logo of Meta is seen at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 11, 2025. (Reuters) 

OpenAI CEO Sam Altman said Meta has offered his employees bonuses of $100 million to recruit them, as the tech giant seeks to ramp up its artificial intelligence strategy.

The alleged attempts by Meta to hire OpenAI staffers are the latest signs of a frenzy to hire top engineers to develop AI models, and they come at a time when the Facebook owner is working on building its superintelligence unit to catch up with competitors.

Competition for AI talent has reached a feverish pitch as superstar researchers are being courted like professional athletes on the belief that individual contributors can make or break companies.

"They (Meta) started making giant offers to a lot of people on our team," Altman said on the Uncapped podcast that aired on Tuesday, hosted by his brother. "You know, like $100 million signing bonuses, more than that (in) compensation per year."

"At least, so far, none of our best people have decided to take them up on that," Altman said.

Meta did not immediately respond to a request for comment outside regular business hours, and Reuters could not verify the information.

"I've heard that Meta thinks of us as their biggest competitor," Altman said.

His comments come just days after Meta invested $14.3 billion in data-labeling startup Scale AI, and hired its top boss, Alexandr Wang, to lead its new superintelligence team.

Meta, once recognized as a leader in open-source AI models, has suffered from staff departures and has postponed the launches of new open-source AI models that could rival competitors like Google, China's DeepSeek and OpenAI.