Intel expects a $600 million hit after an explosion at its Israeli plant
An explosion at Intel's Fab 28 near Kiryat Gat forced a two-week shutdown.
The short version
- The tech giant projects $600 million in lost revenue over two quarters.
- If you buy Intel chips or servers for your business, expect tight supplies and possible delays on older processor lines over the next two quarters.
An explosion at Intel's Fab 28 near Kiryat Gat, Israel, forced the tech giant to shut down the entire manufacturing facility for two weeks, and now the company expects a $600 million hit to its revenue. Dave Zinsner, the chief financial officer of Intel, stated during an earnings call that production is expected to restart by the end of the week.
The mid-October incident caused a shutdown at one of Intel's key facilities for chips produced using its 10nm-class and Intel 7 process technologies. Intel projects the accident will reduce its fourth-quarter 2026 revenue by about $300 million, with a similar loss anticipated in the first quarter of 2027.
The disruption is expected to cut the company's fourth-quarter non-GAAP gross margin by about 2%. Most of the impact is tied to server processors, though Intel has not yet specified when the plant will return to full production capacity. While Intel operates other chip-making facilities in places like Arizona, the company is struggling to satisfy strong demand for server processors and cannot fully offset the lost output.
In addition to lost production time, Intel faces potential losses from damaged wafers that must be written off. Zinsner noted that almost all of the revenue impact relates to 10nm server products, though the shutdown could also affect the availability of some consumer processors. For businesses relying on Intel hardware, planning ahead for hardware shortages may prevent unexpected delays.
