Deadly Intel Fab 28 explosion causes two-week shutdown, to cost $600 million and severely disrupt server chip manufacturing for six months — 10nm Xeon shipments stall during largest shortage in memory
A two-week shutdown of Intel's Fab 28 in Israel will affect server CPU shipments for two consecutive quarters.
Intel suffered a devastating explosion at its Fab 28 facility in Israel, causing a two-week shutdown that will cost the company approximately $600 million in lost revenue over the next two quarters. The disruption to server processors manufactured using Intel's 10nm-class process technologies is expected to reduce shipments during the fourth quarter of 2026 and the first quarter of 2027.
Intel's CFO, Dave Zinsner, stated during the company's earnings call that production will likely resume by the end of the week. The explosion, which occurred in mid-October, resulted in two deaths and one serious injury, and has led to significant damage to Intel's manufacturing capabilities. Intel expects the incident to reduce its Q4 2026 revenue by approximately $300 million and its fourth-quarter non-GAAP gross margin by around 2%.
While Intel has not identified the specific Xeon processor families affected by the accident, the shutdown is expected to impact both server and client processors manufactured using Intel's 10nm-class and Intel 7 processes. Despite having multiple other fabs capable of producing similar components, Intel cannot fully compensate for the loss of production at Fab 28.
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