Intel shares plunged more than 20% after the chipmaker warned that an explosion at its Kiryat Gat manufacturing facility in Israel and continued weakness in the personal-computer market would weigh heavily on near-term results.
Intel expects fourth-quarter revenue of $15 billion to $16 billion, below the $17.07 billion analyst consensus reported by LSEG. Adjusted earnings are projected at 25 cents per share, compared with expectations of 43 cents.
The company estimates the Kiryat Gat disruption will reduce fourth-quarter revenue by roughly $300 million and pressure gross margins by approximately 200 basis points. The facility was shut for two weeks following the October explosion as Intel assessed damaged production and determined which wafers could be recovered.
The operational setback arrives as Intel confronts a second problem: weakening PC demand. Management expects the PC slowdown to continue through at least the first half of 2027.
Intel nevertheless reported third-quarter revenue of $16.5 billion, up 21% from a year earlier. Adjusted earnings reached 52 cents per share, while the company recorded its strongest data-center revenue growth in 15 years.
The divergence underscores the challenge facing Intel’s turnaround. Demand for server processors remains strong, but manufacturing constraints, weaker PC conditions and heavy investment in foundry capacity are limiting the company’s near-term financial outlook.
Investors will now watch the Kiryat Gat production recovery, the amount of affected inventory Intel can salvage and whether PC demand begins stabilizing during the first half of 2027.
