"Intel Corp. shares plunged about 17% after Chief Executive Officer Lip-Bu Tan gave a lackluster forecast and warned that the chipmaker was struggling with manufacturing problems. First-quarter projections for revenue and earnings both fell well short of Wall Street estimates. And a conference call with analysts, where Tan said it would take time and resolve to turn around the company, sent the shares down further."
"Production snags have hampered the comeback bid, a disappointment for investors who anticipated more of a boost from new products. We are on the multiyear journey, the CEO said. Intel, the largest maker of personal computer processors, is suffering from low manufacturing yields the percentage of usable chips coming out of its factories. That's made it harder to fill orders. The once-dominant semiconductor company has spent years trying to restore its technological edge and recover from market share losses, and this is one more setback."
"Demand is quite strong, and the company is working hard to fix its manufacturing problems, Tan said in an interview. But Intel used up much of its inventory in the fourth quarter, he said. Our yield and production manufacturing are not up to my standards, Tan said. We need to improve that."
Intel reported weaker-than-expected first-quarter revenue and earnings projections and warned of persistent manufacturing problems that reduced usable chip yields. Production snags and low manufacturing yields have constrained supply and hampered the company's efforts to regain market share. Management said much of its inventory was used in the fourth quarter, delaying additional supply of server chips until the end of the first quarter. Executives expect supply to increase each quarter and plan 2026 capital spending similar to 2025. The stock dropped sharply, erasing recent gains after investors reacted to the guidance and operational setbacks.
Read at www.mercurynews.com
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