1 Way Intel Will Boost Foundry Profits After $7 Billion Loss
Starting in the first quarter of 2024, Intel (NASDAQ: INTC) will report its foundry operations as a separate business unit. This is part of the company's plan to grow into a major player in the foundry market by 2030. Intel's product divisions will treat the foundry more like an external supplier, and the foundry will treat Intel's product divisions like customers.
In preparation for this switch, Intel recast its financial statements for the past few years to match the new reporting structure. The foundry business is highly unprofitable right now, which shouldn't be too surprising. Almost all of Intel's foundry revenue is internal, the company has been investing heavily in new manufacturing technology and facilities, and the post-pandemic PC market crash gutted demand for the company's chips.
The stock market reacted poorly to the disclosure, sending Intel stock tumbling lower on Wednesday. Intel's foundry segment reported an operating loss of nearly $7 billion in 2023. The company's assurances that the foundry segment would reach breakeven around 2027 and achieve a 30% adjusted operating margin by 2030 did little to brighten investors' moods.
Source Fool.com
Intel Corp. Stock
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