The Kiryat Gat factory blast forced a roughly two-week shutdown that is projected to erase $600 million in revenue across two quarters and lower fourth-quarter gross margins by roughly 200 basis points. In addition to the manufacturing disruption, consumer hardware demand remains depressed, with personal computer chip sales falling 5 percent to $8.10 billion in the third quarter. Consequently, Intel guided fourth-quarter revenue and earnings below analyst forecasts despite third-quarter gains driven by artificial intelligence chip sales. The company remains committed to its broader foundry turnaround, having raised $23 billion in August to support capital spending.
Key points
The Israel manufacturing outage will cut total company revenue by approximately $600 mill…: The Israel manufacturing outage will cut total company revenue by approximately $600 million over two quarters.
Fourth-quarter personal computer chip revenue is projected to decline in the mid-twenty p…: Fourth-quarter personal computer chip revenue is projected to decline in the mid-twenty percentage range.
Leadership is continuing a capital-intensive manufacturing turnaround after raising $23 b…: Leadership is continuing a capital-intensive manufacturing turnaround after raising $23 billion through an August share offering.
Sources checked by our analysis pipeline: 1
Oct 29 : Intel shares plunged some 18 per cent on Thursday after the company disclosed that a factory explosion in Israel will cost it roughly $600 million in lost revenue over two quarters because it has been shut down for about two weeks.
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.
The company said the fourth-quarter revenue outlook would be reduced by roughly $300 million and its gross margins by about 200 basis points, Zinsner said in an interview with Reuters. He said the company expects a similar revenue impact in the first quarter.
Intel is in the process of determining which wafers are salvageable for use and sale after the blast.
"We're still assessing all of the wafers to see which ones are usable and which ones aren't, so we'll have to see whether there is an impact that stretches beyond that," Zinsner…
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