Intel Corp.’s ambitious push into the foundry business, aimed at challenging dominant players like Taiwan Semiconductor Manufacturing Co., has instead become a financial black hole, with losses piling up and no clear path to profitability in sight. Recent disclosures reveal that the unit, known as Intel Foundry, reported an operating loss of $7 billion in 2023 alone, a sharp increase from $5.2 billion the previous year, according to a report from CNBC. This downturn comes amid broader struggles for the chip giant, as it grapples with declining sales and intensifying competition in semiconductor manufacturing.

The foundry arm’s revenue dropped to $18.9 billion last year from $27.5 billion in 2022, underscoring the challenges of transitioning from an integrated device manufacturer to a contract chipmaker. Intel’s CEO has touted this shift as part of a larger turnaround strategy, but the numbers tell a different story, with analysts pointing to outdated processes and a lack of external customers as key hurdles.

Deepening Financial Woes

By 2024, the losses continued to mount, with Intel Foundry posting an additional $5.8 billion operating loss in the third quarter, as detailed in a Digitimes analysis. This persistent bleeding has forced the company to rethink its approach, including massive investments in new fabrication technologies like the 18A process, which is slated for rollout but faces skepticism over its readiness and market appeal.

Investor confidence has waned, evidenced by stock slumps following these revelations. For instance, shares tumbled over 4% in after-hours trading after the 2023 loss announcement, and further declines occurred in 2025 when the company warned of potentially exiting the foundry business if major customers don’t materialize, per Reuters.

Strategic Challenges and Leadership Shifts

Intel’s efforts to reclaim technological leadership have been hampered by delays in advanced node development, allowing rivals to pull ahead. A Intel Newsroom release outlined a new financial framework aimed at transparency and cost savings, yet critics argue it’s insufficient without securing high-profile clients.

The company has faced legal repercussions too, including a derivative lawsuit over the foundry’s challenges, as reported by ICLG. This suit targets board members amid two years of devastating losses, highlighting governance issues in the midst of the turnaround push.

Potential Paths Forward

Looking ahead, Intel is banking on government support and partnerships to stem the tide. The U.S. Chips Act has provided funding, with the company committing $100 billion to domestic chipmaking, according to InformationWeek. However, profitability remains elusive, with projections from The Motley Fool suggesting that manufacturing profits could improve only through aggressive cost-cutting and external orders.

Recent developments, such as Nvidia’s $5 billion stake in Intel, have sparked temporary stock surges, but they don’t address the core foundry deficits, as noted in a IndexBox analysis. With losses now exceeding $13 billion cumulatively, industry insiders question whether Intel can pivot without drastic measures like spinning off the unit.

Industry Implications and Outlook

The struggles at Intel Foundry reflect broader tensions in global chip production, where scale and innovation dictate success. Competitors like TSMC have solidified their positions through consistent execution, leaving Intel to play catch-up in a high-stakes arena.

For now, the company’s leadership reshuffle and cost reductions offer glimmers of hope, but without a surge in demand or technological breakthroughs, the foundry’s turnaround may remain a distant prospect, perpetuating financial strain on the once-dominant player.