Intel Corp.’s stock fell on Thursday. The plunge happened after the reported release of its next-generation chips will be delayed for 6 months.
Also, the company said that, as part of its contingency, it may use a third party to manufacture it.
For the second quarter, Intel’s posted revenue is $19.7 billion, up 20% from a year ago, and well ahead of the company’s guidance of $18.5 billion.
The Big Announcement About 7nm Chips
The announcement happened during Intel Corp.’s second-quarter earnings results.
Intel’s CEO, Bob Swan, mentioned, “We are seeing an approximate six-month shift in our 7-nm based CPU product timing relative to prior expectations.”
“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.”
Swan also added, “We have identified a defect mode in our 7nm process that resulted in yield degradation.”
“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.”
Previously, the company’s target launch of the 7-nanometer chips to be in 2021.
Intel’s CEO said he expects Intel to ship its first 7-nm CPU products in late 2022 or early 2023, with data-center products to be released in the first half of 2023.
What’s Next For Intel?
Intel shares sank more than 10% after hours, following a 1.1% decline in the regular session to close at $60.40. On the other hand, Advanced Micro Devices or AMD shares rallied 8%.
Patrick Moorhead, Moor Insights & Strategy’s principal analyst, said that “The 7-nm push isn’t a positive announcement as many products were dependent on it.”
“Knowing Intel, it always has backups for its backups, and I am sure we will be hearing about enhancements to 10-nm to increase its competitiveness.”