The US chip manufacturer Intel expects years of losses in its contract manufacturing. Last year, the operating loss of the newly restructured division grew from $5.2bn to $7.0bn, as the company announced on Tuesday evening in Santa Clara, California.
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Intel is now publishing its business figures in a new structure. CEO Pat Gelsinger expects that the division will only achieve an operating profit in a few years.
The news was poorly received on the financial market. In premarket US trading, Intel shares fell by more than four percent on Wednesday.
Gelsinger is trying to get the once dominant chip company back on track after difficult years. To this end, Intel should increasingly produce chips on behalf of other companies. It is one of the biggest changes in the history of the group, which had already lost its leading position in chip development before Gelsinger took over at the top of the group in 2021.
The new financial figures and the medium-term goals show how big the challenges are. Sales from contract manufacturing fell from $27.5bn to $18.9bn last year. According to management estimates, the division’s operating loss will grow again in 2024. The business is expected to break even at an operational level around halfway to 2030. That would be around 2027.
So far, the Taiwanese manufacturer TSMC has dominated the chip contract manufacturing market. The company has now even overtaken Intel in terms of total sales.
In the traditional PC processor business, Intel competes primarily with Advanced Micro Devices (AMD). There is also the graphics card specialist Nvidia, whose technologies have long been proven for teaching applications with artificial intelligence. Last year, Nvidia was able to more than double its sales.
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