Intel plunges after PC slump and supply snags hurt outlook
This comes amid shortages of some raw materials and a shutdown of a factory in Israel
Intel's stock plummeted after the company missed analysts' estimates for revenue and profit in its latest quarter due to sluggish demand for PC processors and supply chain issues with its data center components. The company forecasted sales between US$15 billion and US$16 billion for the fourth quarter, while analysts projected a higher range of US$17 billion to US$18 billion.
Profit for the quarter was expected to be US$0.25 a share, excluding certain items, while Wall Street anticipated adjusted earnings of US$0.43 a share. Intel is grappling with a significant decline in the PC market, where laptop and desktop manufacturers are facing shortages of memory semiconductors and rising component prices, leading to reduced PC shipments and demand.
Intel's CEO, Tin Lip-Bu, expressed disappointment over the inability to meet customer requirements due to raw material shortages and a factory shutdown in Israel. He noted that memory pricing has increased substantially and warned that the issue will persist into 2027. Intel expects the PC market slump to continue through at least the first half of 2027, with a projected 10% decline in 2027 following a 12% drop in 2026.
Despite the challenges, the company remains optimistic about the long-term demand for its products and is increasing investments in new equipment to boost production. Intel is also looking to attract orders from other chipmakers to utilize its facilities for manufacturing their components.
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