The manufacturing outage at the 10-nanometer Kiryat Gat facility will reduce Intel's revenue by roughly $300 million in both the fourth and upcoming first quarters, while eroding fourth-quarter gross margins by 200 basis points. Consequently, the company forecast fourth-quarter revenue between $15 billion and $16 billion, falling well short of Wall Street targets. Meanwhile, third-quarter personal computer chip sales dropped 5 percent to $8.10 billion, signaling sustained demand headwinds through early next year. CEO Lip-Bu Tan must now navigate these twin setbacks while continuing a costly turnaround plan aimed at expanding foundry operations.
Key points
Operational halts at the Israeli facility will reduce company revenue by approximately $6…: Operational halts at the Israeli facility will reduce company revenue by approximately $600 million across two consecutive quarters.
Rising memory costs and softening demand are projected to suppress personal computer reve…: Rising memory costs and softening demand are projected to suppress personal computer revenues through the first half of next year.
Intel's steep stock decline pressured the wider chip sector, pushing down shares of rival…: Intel's steep stock decline pressured the wider chip sector, pushing down shares of rivals such as Nvidia and AMD.
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Oct 29 : Intel shares plunged 14 per cent on Thursday after the chipmaker said a deadly explosion at its Israel factory would erase roughly $600 million in revenue over two quarters, with the full financial fallout still uncertain.
The US chipmaker also warned of flagging PC revenue through the first half of next year, as exponential increases in memory prices have weighed on sales. If the stock were to lose this much ground in Friday's session, Intel would shed over $80 billion in market value.
The gloomy outlook reverberated across the chip sector, sending Nvidia, Broadcom, AMD, Micron, Qualcomm and Arm Holdings' US-listed shares between 1 per cent and 6 per cent lower in extended trading.
The October explosion at its Kiryat Gat, Israel factory, or fab, killed two and seriously injured one, according to local media reports. Finance chief David Zinsner said Intel planned to start ramping up production at the facility by the end of this week after a two-week shutdown.
The company said the fourth-quarter revenue outlook would be reduced by roughly $300 million and its…
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