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Released September 18, 2024 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Although Intel Corporation (NASDAQ:INTC) (Santa Clara, California) has said it plans to reduce capital expenditures (capex) in 2024 and 2025, the company recently announced developments aimed at boosting semiconductor production for customers as it continues to build out its U.S. footprint. This includes receiving up to $3 billion in funding under the CHIPS and Science Act of 2022.
Following disappointing financial results for the second quarter, Intel said it now expects gross capex in 2024 to be more than 20% down from prior projections, bringing the capex to between $25 billion and $27 billion. Intel expects net capital spending in 2024 of between $11 billion and $13 billion. In 2025, the company is aiming for gross capex between $20 billion and $23 billion and net capital spending between $12 billion and $14 billion.
Intel's gross capex refers to "GAAP [generally accepted accounting principles] additions to property, plant, and equipment, while net capital spending is a non-GAAP financial measure defined as additions to property, plant, and equipment, net of proceeds from capital-related government incentives and partner contributions."
Intel lost $1.6 billion in the second quarter, a far cry from the $1.5 billion in net profit in second-quarter 2023. Intel's foundry business, which includes its chip-manufacturing operation that supplies customers, earned $4.3 billion in revenue and generated a $2.8 billion loss in the second quarter as the company ramped up production of chips on its next-generation production technologies that use expensive equipment.
Other actions to improve the company's balance sheet include a headcount reduction of more than 15% by the end of 2025 and a reduction in operational expenditures in 2024 and 2025. But "even as we lower overall spending, we will continue to fund the investments needed to deliver our strategy," Chief Executive Officer Pat Gelsinger said in an earnings-related conference call.
Despite the negative sentiment, Intel this week announced several developments aimed at boosting semiconductor production for its U.S. customers.
The Biden administration will provide $3 billion in direct funding under the CHIPS and Science Act for the Secure Enclave program, which is designed to expand semiconductor production specifically for the federal government. This will further Intel's existing collaboration with the Department of Defense.
In addition, Intel entered a multi-year, multi-billion-dollar agreement to manufacture custom chips, as well as wafers, for Amazon Web Services (AWS), Amazon's (NASDAQ:AMZN) (Seattle, Washington) branch for data center operations. Wafers are the base for semiconductor chips.
Intel will produce an artificial intelligence (AI)-specific chip for AWS under Intel's 18A semiconductor-manufacturing process.
The chipmaker also announced it plans to turn its foundry business into an independent subsidiary. This will allow the company to "evaluate independent sources of funding," Gelsinger said in a company memo following a board of directors meeting last week to assess the company's direction.
Regardless, Gelsinger said this week Intel remains "committed to our U.S. manufacturing investments and are moving forward with our projects in Arizona, Oregon, New Mexico and Ohio."
Industrial Info is tracking about $60 billion worth of active and planned projects from Intel in the U.S., which includes semiconductor facilities in those four states. All but two of the projects have received commitments for CHIPS and Science Act funding.
One of Intel's two fabrication (fab) facilities being built in New Albany, Ohio, will support the recent agreement with Amazon. A $10 billion grassroot fab will provide manufacturing capacity for chips for the 18A platform and other computer chips for data centers and personal computers, while another $10 billion fab will produce chips for the automotive and electronic device industries. The projects are expected to wrap up in late 2026 and reach commercial operation in 2027-2028, although earlier this year the completion date was pushed back from 2025, "due to "market challenges and the slow rollout of U.S. government grant money to grow the domestic industry," according to reporting from The Wall Street Journal.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here to read the project reports.
Intel also plans to begin upgrades at its D1D Fab Building in Hillsboro, Oregon in November. Intel says the expansion will allow it to produce more 18A nodes for high-performance computing and mobile applications. Click here to read the project report.
In Arizona, the company is wrapping up the addition of two semiconductor fabs at its campus in Chandler, Arizona, to produce chips for devices such as televisions, PCs and automobiles. The $30 billion project, which is expected to be completed around the end of the year, entails constructing a total of 670,000 square feet--bringing the total number of fabrication plants at the site to six. Click here to learn more.
Meanwhile, a $400 million upgrade project at its chip-manufacturing complex in Rio Rancho, New Mexico (Fab 11X) will make the site Intel's global manufacturing hub for its new Foveros chips, which can be vertically stacked, providing a smaller usage footprint. Subscribers can click here to read more information on the project, which also is expected to wrap up around the end of the year.
Subscribers to the GMI Database can click here for a look at all of the projects discussed in this article and here for the plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Following disappointing financial results for the second quarter, Intel said it now expects gross capex in 2024 to be more than 20% down from prior projections, bringing the capex to between $25 billion and $27 billion. Intel expects net capital spending in 2024 of between $11 billion and $13 billion. In 2025, the company is aiming for gross capex between $20 billion and $23 billion and net capital spending between $12 billion and $14 billion.
Intel's gross capex refers to "GAAP [generally accepted accounting principles] additions to property, plant, and equipment, while net capital spending is a non-GAAP financial measure defined as additions to property, plant, and equipment, net of proceeds from capital-related government incentives and partner contributions."
Intel lost $1.6 billion in the second quarter, a far cry from the $1.5 billion in net profit in second-quarter 2023. Intel's foundry business, which includes its chip-manufacturing operation that supplies customers, earned $4.3 billion in revenue and generated a $2.8 billion loss in the second quarter as the company ramped up production of chips on its next-generation production technologies that use expensive equipment.
Other actions to improve the company's balance sheet include a headcount reduction of more than 15% by the end of 2025 and a reduction in operational expenditures in 2024 and 2025. But "even as we lower overall spending, we will continue to fund the investments needed to deliver our strategy," Chief Executive Officer Pat Gelsinger said in an earnings-related conference call.
Despite the negative sentiment, Intel this week announced several developments aimed at boosting semiconductor production for its U.S. customers.
The Biden administration will provide $3 billion in direct funding under the CHIPS and Science Act for the Secure Enclave program, which is designed to expand semiconductor production specifically for the federal government. This will further Intel's existing collaboration with the Department of Defense.
In addition, Intel entered a multi-year, multi-billion-dollar agreement to manufacture custom chips, as well as wafers, for Amazon Web Services (AWS), Amazon's (NASDAQ:AMZN) (Seattle, Washington) branch for data center operations. Wafers are the base for semiconductor chips.
Intel will produce an artificial intelligence (AI)-specific chip for AWS under Intel's 18A semiconductor-manufacturing process.
The chipmaker also announced it plans to turn its foundry business into an independent subsidiary. This will allow the company to "evaluate independent sources of funding," Gelsinger said in a company memo following a board of directors meeting last week to assess the company's direction.
Regardless, Gelsinger said this week Intel remains "committed to our U.S. manufacturing investments and are moving forward with our projects in Arizona, Oregon, New Mexico and Ohio."
Industrial Info is tracking about $60 billion worth of active and planned projects from Intel in the U.S., which includes semiconductor facilities in those four states. All but two of the projects have received commitments for CHIPS and Science Act funding.
One of Intel's two fabrication (fab) facilities being built in New Albany, Ohio, will support the recent agreement with Amazon. A $10 billion grassroot fab will provide manufacturing capacity for chips for the 18A platform and other computer chips for data centers and personal computers, while another $10 billion fab will produce chips for the automotive and electronic device industries. The projects are expected to wrap up in late 2026 and reach commercial operation in 2027-2028, although earlier this year the completion date was pushed back from 2025, "due to "market challenges and the slow rollout of U.S. government grant money to grow the domestic industry," according to reporting from The Wall Street Journal.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here to read the project reports.
Intel also plans to begin upgrades at its D1D Fab Building in Hillsboro, Oregon in November. Intel says the expansion will allow it to produce more 18A nodes for high-performance computing and mobile applications. Click here to read the project report.
In Arizona, the company is wrapping up the addition of two semiconductor fabs at its campus in Chandler, Arizona, to produce chips for devices such as televisions, PCs and automobiles. The $30 billion project, which is expected to be completed around the end of the year, entails constructing a total of 670,000 square feet--bringing the total number of fabrication plants at the site to six. Click here to learn more.
Meanwhile, a $400 million upgrade project at its chip-manufacturing complex in Rio Rancho, New Mexico (Fab 11X) will make the site Intel's global manufacturing hub for its new Foveros chips, which can be vertically stacked, providing a smaller usage footprint. Subscribers can click here to read more information on the project, which also is expected to wrap up around the end of the year.
Subscribers to the GMI Database can click here for a look at all of the projects discussed in this article and here for the plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
