https://finance.yahoo.com/news/chipmaker-intel-restructures-manufacturing-business-184655848.html
4 replies (most recent on top)
(Reuters) - Intel Corp said on Wednesday its manufacturing business will work like a separate unit and will begin to generate a margin, but gave no clear timeline on when it will start scaling up, sending the chipmaker's shares down about 5%.
The company also did not name a new external customer for the business as part of its foundry services, a key element of Intel's turnaround plans wherein it will offer its manufacturing services to other companies including its competitors.
Intel's internal business units will now have a customer-supplier relationship with the manufacturing business, Chief Financial Officer David Zinsner said on an investor call.
Based on that model, Intel will be the second largest foundry next year with manufacturing revenue of more than $20 billion, he said.
However, the forecast for the business pales in comparison to Taiwan Semiconductor Manufacturing Co's sales, which are expected to be close to $85 billion in 2024, said Summit Insights Group analyst Kinngai Chan.
"The presentation essentially tells investors that its current manufacturing is sub-scale and could remain sub-scale for a while," Chan added.
If anybody saw PG’s open forum at Intel Ireland last November, he pretty much pre announced this when he told AM Holmes several times that she would now be accountable for a P and L. He also have the numbers re comparative output and cost for TSMC …. Intel needs to make up sooooo much ground it’s unreal
The news article says the CFO claims a 20B revenue for the Mfg unit, which is consistent with about 40-50% margin at product level(product revenue of 40-50B).
I think what drove stock down was the reference to "Mfg unit will start to generate margin"...implying that currently it is zero margin?
TSM makes 50+% margin selling wafers to AMD/NVDA/etc, and they make 50+% margin on the chips they sell.
- so hearing this "will start to generate margin" in the future is a grim reminder as to how far behind the "technology will be leadership in 2 years" claim actually is.
Yeah they need to announce some customers, or shareholders will realise it's all talk