The $1.55 Problem
Everyone talks about “IDM 2.0” and the foundry revolution. I decided to look at the unit economics of this revolution.
In Q3 2025, Intel Foundry generated $4.2 billion in revenue. Sounds decent, right? But to generate that revenue, they posted an operating loss of $2.3 billion.
Let’s do the math on the cost of goods.
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Revenue: $4.2B
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Loss: -$2.3B
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Total Cost: $6.5B
This means for every $1.00 of manufacturing service Intel sells, it costs them $1.55 to deliver it.
The Capital Sinkhole
They are spending $18 billion in CapEx this year to build factories that currently lose 55 cents on every dollar of revenue. They call it “Smart Capital.” I find the definition of “smart” to be quite fluid in the corporate world.
Usually, you invest to capture a margin. Here, they are investing record amounts to capture a loss. Is this a business strategy, or just an expensive way to heat the atmosphere?