Intel Corporation (NASDAQ: INTC) shares fell another 8.80% to close at $59.97 on Monday, extending Friday’s selloff, while the chipmaker’s regulatory filing warned that an October accident at its Fab 28 manufacturing facility in Israel would adversely affect manufacturing costs, gross profit and operating results through the first half of 2027.
The California-based chipmaker included the warning in its Form 10-Q, which the SEC accepted Thursday evening and assigned an October 30 filing date. Shares then plunged 28.6% on Friday following disappointing fourth-quarter guidance.
During Intel’s October 29 earnings call, Chief Financial Officer David Zinsner estimated the factory disruption would reduce fourth-quarter revenue by about $300 million and lower gross margin by 200 basis points (two percentage points).
Intel’s fourth-quarter revenue forecast already includes the estimated $300 million impact from the Fab 28 disruption.
Intel said the accident at its Kiryat Gat facility halted manufacturing for approximately two weeks. The October 14 explosion killed two workers and seriously injured a third, according to The Times of Israel.
The company expects fourth-quarter charges for scrapped inventory, facility cleanup and remediation, and unused manufacturing capacity.
Reduced production volumes and operating inefficiencies during the shutdown and recovery period are also expected to affect financial results beyond the current quarter.
The company cannot yet reasonably estimate the incident’s total financial impact or potential insurance recoveries.
Intel Warns Fab 28 Revenue Impact Could Continue Into 2027
Nearly all the projected revenue loss relates to 10-nanometer server processors manufactured at Fab 28.
Zinsner said the revenue impact could be similar in the first quarter of 2027, although most write-offs for damaged semiconductor wafers are expected to occur in the fourth quarter.
Intel said the accident’s ultimate financial consequences will depend on the extent of property damage, the duration of operational disruptions, remediation costs, insurance recoveries, and its ability to offset production shortfalls at other facilities.
The company maintains insurance covering certain incident-related losses, but potential reimbursements remain subject to deductibles, coverage limits and the claims settlement process.
Fab 28 Production Resumes as Intel Shares Extend Losses
Ynet reported that operations at Fab 28 began resuming Sunday after the two-week shutdown. Intel also confirmed that production was restarting.
Intel shares remained under pressure Monday after Friday’s selloff pushed the stock down to $65.76 from the previous session’s $92.07 close. Trading volume during the selloff reached 455.6 million shares, more than three times the 134.2 million shares traded in the preceding session.
Intel, however, has attributed the market reaction primarily to its weaker fourth-quarter outlook rather than the factory accident.
In comments to Ynet, the company said slowing PC demand linked to an industry-wide memory shortage had primarily affected its outlook.
Intel forecast fourth-quarter revenue of $15 billion to $16 billion, below analysts’ average estimate of approximately $17.07 billion, according to LSEG data.
Zinsner also said Intel expects gross capital spending to rise sharply in 2027 and does not anticipate generating positive free cash flow that year.
The company expects PC-market weakness to continue through at least the first half of 2027, while shortages of memory, substrates and other critical components could also constrain production and demand.
Although manufacturing is beginning to resume at Fab 28, Intel’s regulatory filing indicates the accident’s financial effects will extend beyond the restart, with total costs and potential insurance recoveries still undetermined.
