The chipmaker forecast fourth-quarter revenue of between $15 billion and $16 billion, below analysts' average estimate of $17.07 billion. Adjusted earnings are expected to reach 25 cents per share, also falling short of market expectations of 43 cents. The guidance followed third-quarter revenue of $16.51 billion, up 21% year on year, but offered little reassurance about the company's near-term growth prospects.
Intel's finance chief David Zinsner warned that weakness in the PC market could persist through at least the first half of 2027. The company's PC chip sales declined by 5% to $8.10 billion in the September quarter, missing analysts' expectations. Management expects segment sales to fall further in the current quarter as higher memory prices increase production costs and put additional pressure on computer affordability.
The outlook has implications for the wider semiconductor industry. Memory manufacturers have increasingly prioritised high-bandwidth products used in artificial-intelligence infrastructure, contributing to tighter supply and higher costs for components used in conventional computers. This creates additional pressure for manufacturers already navigating cautious consumer spending and uneven demand.
Intel's difficulties also extend beyond its PC business. An explosion at its Kiryat Gat manufacturing facility in Israel disrupted production for two weeks. The company estimated that the incident would reduce fourth-quarter revenue by approximately $300 million and gross margins by around 200 basis points.
Intel shares fell sharply following the forecast, while other major chipmakers also came under pressure as investors reassessed the outlook for semiconductor demand.
For Intel, the immediate challenge is to balance investment in manufacturing capacity and artificial-intelligence processors against weaker demand in its traditional markets. Its turnaround strategy will depend on restoring competitiveness, improving production efficiency and demonstrating that growth in data-centre chips can offset continued pressure on PC sales.
