What's Happening?
Intel Corporation announced a new financial reporting structure aligned with its foundry operating model, aimed at increasing transparency and driving cost savings. The new structure will present segment results for Intel Foundry, which includes foundry technology development, manufacturing, and services. Intel Foundry will recognize revenues from external customers and Intel Products, with a focus on achieving profitable growth and unlocking value across Intel's capital assets. The company targets significant cost savings and operational efficiencies, with a goal of achieving 60% non-GAAP gross margins and 40% non-GAAP operating margins by 2030.
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Why It's Important?
The restructuring of Intel's financial framework is a strategic move to enhance accountability and incentivize performance across its business units. By establishing a foundry relationship between Intel Foundry and Intel Products, the company aims to leverage its manufacturing capabilities to deliver cutting-edge solutions and drive long-term growth. The new model is expected to unlock unrealized value and create efficiency opportunities, positioning Intel Foundry as a key player in the semiconductor industry. The focus on cost competitiveness and process technology leadership is crucial for Intel to maintain its market position and deliver shareholder value.
What's Next?
Intel plans to implement the new financial reporting structure starting in the first quarter of 2024. The company will host an investor webinar to present the vision and financial framework for Intel Foundry, including recast financials and new segment reporting. Intel Foundry aims to achieve break-even operating margins by 2030, with a focus on expanding its external foundry business and growing its advanced packaging capabilities. The appointment of Lorenzo Flores as CFO of Intel Foundry is expected to support the company's financial goals and drive strategic initiatives.
