- Intel Foundry Services reports $7 billion operating loss in 2024, worsening from 2023
- Company delays profitability target to 2027 as clients hesitate to commit to its process nodes
What happened: Foundry struggles deepen
Intel’s contract chip manufacturing business continues to face significant challenges, with the division reporting a $7 billion operating loss for 2024. This marks a deterioration from 2023’s $5 billion loss, despite the company investing $20 billion in new fabrication plants across the US and Europe – investments outlined in Intel’s official foundry roadmap.
The chipmaker has pushed back its profitability target for the foundry business to 2027, three years later than originally planned. Industry analysts note that key potential clients like Qualcomm and NVIDIA have recently extended partnerships with TSMC instead of switching to Intel, citing concerns about yield rates and process maturity.
Also read: Intel names chip industry veterans to board amid CEO search
Also read: Intel faces credit downgrade from S&P Global due to struggles
Why it’s important
Intel’s foundry ambitions are crucial to both its turnaround strategy and Western efforts to rebalance global semiconductor production. The US CHIPS Act allocated $39 billion in subsidies specifically to boost domestic chipmaking, with Intel securing over $10 billion in direct grants and loans. However, SemiAnalysis reports suggest the company’s 18A process may still trail TSMC’s 2nm technology in both power efficiency (by 15-20%) and transistor density, with the gap potentially widening for 3nm-equivalent nodes.
The delays have broader geopolitical implications. As Geopolitical Economy Group notes, Intel’s struggles could prolong Asia’s dominance in advanced chipmaking until at least 2030, with TSMC and Samsung controlling 78% of the foundry market. This comes as governments from the EU to Japan commit $100+ billion in combined subsidies, viewing semiconductor self-sufficiency as critical for both economic competitiveness and military supply chain security amid rising US-China tensions.
