Samsung Electronics' customers have praised the competitiveness of its next-generation HBM4 chips, with the company aiming to catch up with rivals like SK Hynix in AI chip markets, while also expanding its foundry business through major deals such as with Tesla. Despite positive market performance and record highs, Samsung faces challenges from rising component costs and global trade risks as it seeks to maintain its competitive edge.
Intel is in early talks to manufacture chips for AMD, which caused Intel's stock to rise significantly; this move could boost Intel's foundry business and signal confidence between the two competitors.
The Trump administration structured a deal with Intel that includes a 10% government stake and a warrant to prevent Intel from spinning off its unprofitable foundry unit, aiming to boost U.S. chip manufacturing but forcing Intel to retain a struggling division.
President Trump injected nearly $9 billion into Intel in exchange for a 9.9% stake, but analysts doubt this will save Intel's struggling foundry business, which faces challenges with yield and competition from TSMC and Nvidia. The investment aims to support Intel's advanced manufacturing processes, but securing external customers remains critical for its success.
Intel's SEC filing revealed a $7 billion operating loss in 2023 for its foundry business, separate from its product business, raising concerns about its ability to find external customers and weather increased competition in the AI-chip space. Analysts are skeptical about Intel's timeline for reaching benchmark goals and the company's ability to achieve operating margin break even until 2027, indicating a potentially slower ramp than anticipated.
Intel stock dropped after the chipmaker revealed disappointing financials for its foundry business, with the unit reporting a $7 billion operating loss for 2023 and a 31% revenue decline. Despite plans to become a major contract chipmaker, analysts expressed skepticism over the unit's prospects, with doubts about Intel's financial targets and the timing of its goals. While Intel is separating its two main businesses internally, it is unlikely to split into two companies in the near future. The company is also receiving significant government funding to bolster semiconductor manufacturing in the U.S.
Intel's shares dropped nearly 7% as the company's foundry business reported operating losses of $7 billion in 2023, highlighting the significant gap in profitability compared to rival TSMC. The U.S. chipmaker has been investing billions to regain its position as a leading chipmaker, but faces substantial headwinds. Intel plans to spend $100 billion on plants in the U.S., aiming to break even in its contract chip-making business by 2027. However, it expects the foundry business to have a gross margin of about 40% by 2030, trailing TSMC's 53% margin.
Intel disclosed a $7 billion operating loss for its foundry business in 2023, a steeper loss than the previous year, as it aims to regain a technology lead lost to TSMC. CEO Pat Gelsinger expects 2024 to be the worst year for operating losses and aims to break even by 2027. The company attributes the losses to past decisions and has outsourced 30% of its wafers to external manufacturers. Intel plans to invest $100 billion in building or expanding chip factories in the U.S. and hopes to attract outside companies to use its manufacturing services.
Intel revealed a $7 billion operating loss in its foundry business for 2023, wider than the previous year, causing a 4% drop in its shares. The company, historically involved in both chip design and manufacturing, plans to expand its foundry business to produce chips for other companies. Intel expects the foundry's losses to peak in 2024 and aims to break even by the end of 2030, with $15 billion in foundry revenue already booked. CEO Patrick Gelsinger emphasized the potential for considerable earnings growth from the foundry business, attributing the lack of profitability to past decisions and slow adoption of advanced chip-making technology.
Intel's CEO revealed that the company's own fabs are open to making chips for its long-standing rival AMD, signaling a potential shift in one of the great rivalries in PCs. With big plans for its foundry business and hopes to beat its biggest rival TSMC in advanced chip manufacturing by 2025, Intel aims to sell to a broad set of customers, including major tech companies like Microsoft, Nvidia, Qualcomm, Google, and potentially AMD. This unexpected move could reshape the landscape of chip manufacturing and competition in the tech industry.
OpenAI CEO Sam Altman is advocating for up to $7 trillion to develop silicon-chip manufacturing capacity for AI, which has caught the attention of industry leaders. Intel, under the leadership of CEO Pat Gelsinger, is positioning itself as a key player in the AI chip manufacturing space, aiming to become the chip manufacturer for the West. Altman's vision aligns with Intel's ambitious foundry business, and the company's upcoming event is expected to provide updates on its foundry strategy. With the increasing demand for advanced foundry capabilities in the U.S. and other western geographies, Intel is seen as a crucial partner in meeting the need for AI semiconductors.
Intel shares surged over 9% after the company's third-quarter earnings beat estimates, driven by gains in its foundry business and increasing demand for artificial intelligence (AI) chips. Intel's foundry business, which manufactures chips for corporate and government clients, saw a 299% increase in revenue compared to the same period last year. The company's CEO, Patrick P. Gelsinger, highlighted the advantage of Intel's advanced packaging business in the context of AI. Intel added major new clients and expects further growth in its foundry business, which could be a significant source of revenue. The company also reported signs of recovery in the PC market and cost reductions. Bank of America analysts anticipate continued growth for Intel.
Intel's CEO, Pat Gelsinger, received positive feedback for the company's third-quarter guidance and prepayment for its foundry business, but investment firm Citi believes Intel is still at risk. Citi analyst Christopher Danely suggests that Intel should exit the foundry business due to limited chances of success. Gelsinger announced a prepayment from an unidentified customer for Intel's upcoming technology node, 18A, scheduled for production in the second half of next year. Citi also expresses concerns about Intel and AMD's data center businesses potentially missing their second-half targets due to increasing focus on AI demand led by Nvidia. Intel's shares rose around 1% in pre-market trading.
Intel is set to provide an update on its foundry business today, with a focus on expanding its custom chip-making business. The chip maker's stock is dropping ahead of the event, which is scheduled to start at 11:30 a.m. EST.
Samsung will unveil its 3nm and 4nm technologies at the VLSI Symposium 2023 in June, showcasing the benefits of its SF3 and SF4X processes. The SF3 process is said to be 22 percent faster than SF4 while operating at the same power limit and 34 percent more efficient when running at the same frequency and transistor count. SF4X offers a 10 percent performance improvement and 23 percent power-efficiency improvement compared to SF4. Samsung's latest technologies will compete with TSMC's N4P and N4X nodes.
