Intel: heavy losses at 'Foundry' send stock into a spin

(CercleFinance.com) - Intel unveiled a new reporting structure for its results, an announcement that highlighted the heavy losses incurred last year by its recently-formed Foundry business (i.
e. semiconductor manufacturing). NB: cp yesterday: -8.2%.

The US chipmaker's stock fell by around 7% yesterday, by far the biggest drop on the Dow Jones index.

In a press release issued on Tuesday evening, Intel explains that its new reporting structure will be based on a first division, called 'products', grouping together its consumer processors (CCG), its data center and AI equipment (DCAI) and its network and edge hardware (NEX).

In addition to this first branch, the second - called 'Intel Foundry' - will be based on its wafer foundry activities, a recently launched business which, according to its accounts, will post an operating loss of almost $7bn in 2023.

Finally, the 'Other activities' segment will include, in particular, the programmable chips subsidiary Altera and its Israeli entity dedicated to autonomous driving, Mobileye.

The first criticism of Intel is that the presentation shows a gross margin target of 60% and an operating margin of 40% by 2030, argue analysts at Wedbush Securities.

While these projections appear to be in line with the company's long-term business model, they are three to four years behind the targets last set by the group, it laments.


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