(Reuters) – Intel Corp said on Wednesday its manufacturing business would operate as a separate unit and start generating margin, but did not say when it would start expanding, sending shares of the chipmaker down around 5%.
The company also did not name a new external customer for the company as part of its foundry services, a key part of Intel’s turnaround plans in which it will offer its manufacturing services to other companies. including its competitors.
Intel’s internal business units will now have a customer-supplier relationship with the manufacturing company, Chief Financial Officer David Zinsner said on an investor call.
Based on this model, Intel will be the second-largest foundry next year with manufacturing revenues of more than $20 billion, he said.
However, the forecast for the company pales in comparison to Taiwan Semiconductor Manufacturing Co’s sales, which are expected to reach nearly $85 billion in 2024, said Summit Insights Group analyst Kinngai Chan.
“The presentation basically tells investors that its current manufacturing is on a lower scale and could stay on a lower scale for some time,” Chan added.
(Reporting by Chavi Mehta in Bengaluru; Editing by Maju Samuel)