Intel's $2.8B Q1 loss and 36 percent revenue slide were slightly less horrible than expected
Intel CEO Pat Gelsinger has defended the company's plan to become a chipmaker for hire after the company's profits plunged 134 percent year over year and it recorded a $2.8 billion loss during the first quarter of 2023.
Intel has traditionally built fabrication plants to manufacture its own chips, but has seldom built silicon for third parties. Gelsinger reversed that policy, deciding that Intel must develop a substantial foundry business. "While everyone understands that we are establishing an internal foundry model, I'm not sure we have fully explained the importance and impact of this change," he said, insisting that hiring out its chipmaking chops will drive efficiencies, reduce development and design costs, and allow the company to better compete with chipmakers that rely on rival fabs.
The comments come as Intel pushes ahead with plans to invest roughly 30 percent of its annual revenues into capex to support of its massive foundry construction projects. Despite Gelsinger's enduring confidence in the company's Integrated Device Manufacturing 2.0 strategy, the benefits of the plan are yet to become apparent:
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