Intel Says Israel Fab Shutdown Will Cut Fourth-Quarter Revenue by $300 Million

Intel said on October 29 that the shutdown of its factory in Israel would reduce fourth-quarter revenue by approximately $300 million. The company also included a gross-margin impact of roughly 200 basis points in its quarterly outlook as it assessed the disruption to semiconductor production. The Kiryat Gat facility primarily produces data-center chips using Intel’s 10nm manufacturing process. Operations had been halted for two weeks, and the company was still determining which wafers could be used or sold. Chief Executive Lip-Bu Tan said, "Our immediate priority is to unlock additional supply to meet extraordinary demand for our Xeon family." Intel forecast fourth-quarter revenue of $15 billion to $16 billion. Its outlook included a non-GAAP gross margin of 38%, an 11% tax rate and non-GAAP earnings of $0.25 per share. These figures describe the company’s overall forecast, including the manufacturing disruption, rather than the results of its Israeli operation alone. The disclosure accompanied third-quarter results showing $16.5 billion in revenue, up 21% from a year earlier. Data Center and AI revenue reached $7.3 billion, an increase of 78% year over year. Chief Financial Officer David Zinsner said Intel would continue investing in capacity and working capital to increase supply, while expecting weakness in the PC market to persist through at least the first half of 2027.