Intel shares fall after company reveals $7 billion operating loss in foundry business

Intel shares fell 4% at one point in extended trading on Tuesday after the company revealed long-awaited financials for its semiconductor manufacturing business, often called a foundry business, in a SEC filing.

Intel said that its foundry business recorded an operating loss of $7 billion in 2023 on sales of $18.9 billion. That's a wider loss than the $5.2 billion Intel reported in its foundry business in 2022 on $25.7 billion in sales.

This is the first time that Intel has disclosed how much revenue its foundry business does. Historically, Intel has both designed its own chips as well as doing its own manufacturing, and reported final chip sales to investors. Other American semiconductor companies such as Nvidia and AMD design their chips but send them off to Asian foundries — often Taiwan's TSMC — for manufacturing.

Intel has been pitching investors under CEO Patrick Gelsinger on a plan where it would continue to make its own processors, but would also start an external foundry business to make chips for other companies. Intel's role as one of the only American companies doing cutting-edge semiconductor manufacturing on American soil was a big reason why it secured nearly $20 billion in CHIPS act funding last month.

Much of Intel's foundry revenue currently comes from its own operations, Intel said on Tuesday. Intel also restated its products divisions to report its costs as if it were a so-called "fabless" company that has to account for foundry as a cost.

Intel said its newly-organized Products division, which mainly consists of processors for PCs and servers, reported $11.3 billion in operating income on $47.7 in sales in 2023.

Intel said on Tuesday that it expected its foundry's losses to peak in 2024 and eventually