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Intel's $18.8B Foundry Losses Raise Doubts on U.S. Chip Manufacturing
8 Aug
Summary
- Intel lost $18.8B in its foundry division in 2024 despite $8.5B in subsidies
- Intel's 18A chip project faces yield issues, jeopardizing advanced chip production
- Intense competition from rivals like AMD and Qualcomm compounds Intel's struggles
According to the latest reports, Intel Corporation's foundry division has faced staggering losses of $18.8 billion in 2024, despite receiving $8.5 billion in subsidies from the U.S. government's CHIPS Act. This revelation has raised serious questions about the viability of domestic semiconductor manufacturing in the face of global competition.
CNBC's "Mad Money" host Jim Cramer has taken to social media to highlight Intel's financial challenges, questioning whether producing chips in the U.S. is truly sustainable. Intel's ambitious 18A chip project, which is crucial for the company's efforts to regain its technological edge, has reportedly encountered significant yield issues, threatening its ability to profitably manufacture advanced components.
The 18A process, developed over several years and backed by multibillion-dollar factory investments, is central to Intel's plan to become a top-tier foundry, rivaling industry leader Taiwan Semiconductor Manufacturing Co. (TSMC). However, only a small fraction of the 18A-produced Panther Lake chips have met the required quality standards, raising concerns about Intel's readiness to deliver high-end components at scale.
Intel's financial struggles have been further compounded by intense competition from rivals like Advanced Micro Devices (AMD) and Qualcomm Inc. (QCOM). The company's credit rating has also been downgraded by Fitch Ratings, citing the ongoing challenges in maintaining demand for its semiconductor products.
