Intel shares drop 18% on Israel factory blast, PC weakness

On October 29, Intel shares fell 18% after the company announced a deadly explosion at its Israel factory, which will result in roughly $600 million in lost revenue over two quarters. The financial impact of the blast remains uncertain. In addition, Intel warned of declining PC revenue throughout the first half of next year, as rising memory prices have negatively affected sales.

If Intel's stock were to lose this much value in Friday's trading session, it would lose over $80 billion in market value. The disappointing outlook affected other chip sector stocks, causing Nvidia, Broadcom, AMD, Micron, Qualcomm, and Arm Holdings' US-listed shares to drop between 1% and 6% in extended trading.

Intel's plant in Kiryat Gat, Israel, where the explosion occurred, largely produces data center chips using the company's 10 nanometer manufacturing process. Two workers were killed and one seriously injured in the incident. Intel's finance chief, David Zinsner, stated that production at the site would resume by the end of the week following a two-week shutdown.

Intel's fourth-quarter revenue outlook was reduced by approximately $300 million, while its gross margins decreased by around 200 basis points. Zinsner predicted a similar revenue impact in the first quarter. The company is currently assessing which wafers can be salvaged for use and sale following the blast.