Intel shares plunge as chipmaker suffers manufacturing

Intel shares plunge as chipmaker suffers manufacturing

Intel shares plunged by as a lot as 17% on Friday after the chipmaker admitted it was struggling to fulfill demand for its high-powered AI chips.

The Santa Clara, Calif.-based agency, which makes chips wanted for data facilities, is in the midst of a turnaround effort as it seems to capitalize on surging demand from tech giants who want chips and servers to energy the artificial intelligence growth.

During a name with traders, Intel executives, including chief monetary officer David Zinser, admitted that provides had ran partially because they underestimated demand.

FILE PHOTO: A smartphone with an Intel brand displayed is positioned on a pc motherboard in this illustration created on March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo REUTERS

ZInser said he expects shortages would continue in the first quarter however ought to start to enhance by mid-year.

“The ‌server cycle seems real, but the company appears to have woefully misjudged it with its capacity footprint caught massively off guard,” Bernstein analysts said in a observe.

In the fourth quarter, Intel reported a web loss of $333 million, worse than Wall Street had anticipated.

The company tasks a loss of 21 cents per share in the first quarter as it ramps up spending to deal with the shortfall.

The dismal outcomes marked a major setback for Intel, whose shares had surged 84% last yr, pushed partially by investor optimism over major investments by the US authorities, funding big SoftBank and Nvidia.

Intel has struggled with low manufacturing yields, which refers to the variety of viable chips produced at its vegetation.

FILE PHOTO: An Intel brand seems in this illustration created on August 25, 2025. REUTERS/Dado Ruvic/Illustration/File Photo REUTERS

Intel CEO Lip-Bu Tan said the company was “working tirelessly to drive efficiency and more output” and was on what he described as a “multiyear journey” to spice up manufacturing.

“While yields are in line with our internal plans, they are still below what I want them to be,” Tan said during a convention name on Thursday. “Accelerating yield improvement will be important lever in 2026 as we look to better support our customers.”

With Post wires

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