Intel Targets 40% Foundry Margins by 2024, Reports $7B Loss in 2023 Amid Restructure

Intel has announced a new financial reporting structure that aligns with its previously announced Foundry Operating Model for 2024 and beyond, targeting 40% adjusted gross margins at its foundry. The company has outlined ambitions to achieve 60% non-GAAP gross margins and 40% non-GAAP operating margins by 2030. Despite these ambitions, Intel has reported declining revenue from its factories and widening losses, highlighting the challenges of its expensive expansion plan. The foundry business is expected to report losses for the next few years, with a $7 billion loss reported in 2023. Intel's segmentation into product and foundry businesses aims to provide the market with greater transparency and understanding of its current and future operations, as detailed in the Intel 8k breaking out product and foundry revenue. Additionally, Intel's 5 in 4 strategy and the announcement that 18A-based CPUs will ramp to high volume in 2026 are part of its efforts to navigate these challenges. However, analysts have raised concerns about the profitability of Intel's foundry business and the longer timeframe for reaching its margin targets.