Intel Plunges 18% After Saying Its Next-Generation Chips Will Come Out 6 Months
According to Business Insider, Intel’s shares “plunged as much as 18% Friday to $49.50 per share after the company said that the release of its next-generation chips would be delayed by six months.”
This announcement “came during Intel’s second-quarter earnings results, released Thursday,” Business Insider said. “The company reported earnings per share and revenue that beat Wall Street’s expectations.”
"We are seeing an approximate six-month shift in our 7nm-based CPU product timing relative to prior expectations," Intel CEO Bob Swan said in a statement. "The primary driver is the yield of our 7nm process, which based on recent data, is now trending approximately twelve months behind our internal target."
"We have identified a defect mode in our 7nm process that resulted in yield degradation,” Swan continued. “We've root-caused the issue and believe there are no fundamental roadblocks, but we have also invested in contingency plans to hedge against further schedule uncertainty."
Intel had previously announced that its 7-nanometer chips would launch in 2021. In addition “to the delay in releasing the 7-nanometer chips, Intel offered a weaker-than-expected guidance for its third quarter earnings results. The company foresees adjusted earnings per share of $1.10 on $18.2 billion in revenue, where analysts had expected slightly higher EPS.”
Intel had risen 1% year-to-date through Thursday’s close, while “shares of rival chipmaker Advanced Micro Devices climbed as much as 12% Friday on the news,” Business Insider added.