April 3 Reuters Intel shares fell 5 before the bell on Wednesday, as ballooning losses at its contract chipmaking business signaled the company could take years to catch up with the profitability of Taiwan Semiconductor Manufacturing Co.

Disclosing new financials details for its foundry unit on late Tuesday, Intel said the business posted operating losses of 7 billion in 2023 compared with 5.2 billion in 2022.

We expected foundry economics to be bad, and they truly are, said Bernstein analyst Stacy Rasgon. We likely have several years of substantial headwinds still in front of us.

Intel is set to lose more than 9 billion in market value if the premarket losses hold.

The company has been spending billions of dollars to return as the dominant maker of cuttingedge chips, a position that it lost to Taiwan Semiconductor Manufacturing Co., which is now the world39;s biggest contract chipmaker.

The U.S. chipmaker39;s capital investments classified as construction in progress totaled 43.4 billion as of Dec. 30, 2023, compared with 36.7 billion a year earlier.

Intel also plans to spend 100 billion on plants across four states in the United States, in part helped by funding from the U.S. Chips Act.

CEO Pat Gelsinger said operating losses for its contract chipmaking business would peak in 2024 before breaking even by about 2027. It accounted for about 35 of Intel39;s total net revenue in 2023.

Intel expects the foundry business to have a gross margin of about 40 by 2030,…