Intel’s Foundry unit continues to experience operating loss

Intel has reported a net revenue loss of $400 million in the first quarter of 2024, with its Foundry business unit continuing to experience a significant downturn. CEO Pat Gelsinger said that the revenue decline for the Foundry unit was not unexpected and the company expected 2024 would see it post its biggest operating losses, before eventually breaking even in 2027.

“We are executing on our strategy to drive meaningful improvement in profitability over time. We are obviously not there yet, given the large upfront investment we needed to build out this business,” Gelsinger told analysts on Thursday. “But we always said this was going to be a multi-year plan, and we are right on track with where we expect it to be right now.”

He added that Intel expects to see its average wafer pricing triple in comparison to costs over the coming decade, which will drive “significant margin expansion.” Gelsinger said, “In addition, more competitive wafers will allow us to bring home many of the tiles that today are being manufactured at external foundries.”