Key Takeaways
- Intel shares fell further Wednesday amid a broader selloff of chip stocks, as the company’s contract manufacturing business got another piece of bad news.
- Reuters reported that recent tests of Intel’s latest manufacturing process conducted by Broadcom failed.
- Intel stock has lost roughly 60% of its value this year, including a 26% drop following a disappointing earnings report last month.
Intel (INTC) shares extended their losses Wednesday amid a stretch of bad news, as Reuters reported that recent tests of the chip giant’s most advanced manufacturing process conducted by Broadcom (AVGO) failed.
Silicon wafers, which chips are printed on, reportedly were returned to Broadcom last month after they were run through Intel’s 18A manufacturing process. A review by Broadcom engineers found that the process isn’t ready to be used for high-volume production, Reuters said.
Intel and Broadcom did not immediately respond to Investopedia requests for comment.
Latest Piece of Bad News for Intel
While many chip stocks have surged amid artificial intelligence (AI) demand, Intel shares have lost about 60% of their value since the start of 2024.
Those struggles have accelerated over the last month, with a disappointing earnings report and the announcement that it would lay off about 15% of its employees as part of a larger cost-cutting plan. The earnings report sent shares 26% lower the day after it was released, to their lowest point in over a decade.
The earnings-related fall was followed by reports that concerns have emerged over the company’s planned construction of two new facilities in Germany. On Tuesday, shares were driven lower by a report that executives are preparing to present plans to cut costs and sell assets amid the company’s struggles, and concerns that Intel could potentially face removal from the Dow Jones Industrial Average (DJIA).
Intel shares were 2% lower at $19.67 early Wednesday afternoon.