{"id":298556,"date":"2026-01-23T00:15:06","date_gmt":"2026-01-23T00:15:06","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/298556\/"},"modified":"2026-01-23T00:15:06","modified_gmt":"2026-01-23T00:15:06","slug":"intel-struggles-to-meet-ai-data-center-demand-shares-drop-13","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/298556\/","title":{"rendered":"Intel struggles to meet AI data center demand, shares drop 13%"},"content":{"rendered":"<ul data-testid=\"Summary\" class=\"summary-module__summary__QjADA\">\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">CEO Tan focuses on cost-cutting and new product road map<\/li>\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">Intel&#8217;s new manufacturing tech faces yield challenges, affecting margins<\/li>\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">Intel&#8217;s stock has outperformed semiconductor index despite challenges<\/li>\n<\/ul>\n<p>Jan 22 (Reuters) &#8211; Intel <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/markets\/companies\/INTC.O\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">(INTC.O), opens new tab<\/a> said on Thursday it struggled to satisfy demand for its server chips used in AI data centers, and forecast quarterly revenue and profit below market \u200bestimates, sending shares down 13% in after-hours trading.<\/p>\n<p>The forecast underscores the difficulties faced by Intel in predicting global chip markets, where the company&#8217;s current products are the result of decisions \u200cmade years ago. The company, whose shares have risen 40% in the past month, recently launched a long-awaited laptop chip designed to reclaim its lead in personal computers just as a memory chip crunch is expected to depress sales across that industry.<\/p>\n<p data-testid=\"promo-box\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__promo-box__hVl8h\"> Sign up  <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/business\/intel-forecasts-first-quarter-sales-profit-below-estimates-2026-01-22\/undefined?location=article-paragraph&amp;redirectUrl=%2Fbusiness%2Fintel-forecasts-first-quarter-sales-profit-below-estimates-2026-01-22%2F\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">here.<\/a><\/p>\n<p>Meanwhile, Intel executives said the company was caught off guard by surging demand for server central processors that accompany AI chips. Despite running its factories at capacity, Intel cannot keep up with demand for the chips, leaving profitable data center sales on the table while the new PC chip squeezes its margins.<\/p>\n<p>&#8220;In the short term, I&#8217;m disappointed that we are not able to fully meet the demand in our markets,&#8221; Chief Executive Officer Lip-Bu Tan told analysts on \u200ca conference call.<\/p>\n<p>The company forecast current-quarter revenue between $11.7 billion and $12.7 billion, compared with analysts&#8217; average estimate of $12.51 billion, according to data compiled by LSEG.<\/p>\n<p>It expects adjusted earnings \u200bper share to break even in the first quarter, compared with expectations of adjusted earnings of 5 cents per share.<\/p>\n<p>Intel&#8217;s forward PE hits historic highInvestors and analysts have hoped that rapid data center buildouts commissioned by large tech companies to advance their AI businesses will drive sales for Intel&#8217;s traditional server chips that are used alongside Nvidia&#8217;s <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/markets\/companies\/NVDA.O\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">(NVDA.O), opens new tab<\/a> market-leading graphics processing units (GPU).<\/p>\n<p>Demand for AI surprised some of the cloud-computing giants, which have had to scramble in order to upgrade \u200daging fleets of chips because of an &#8220;erosion in networking performance,&#8221; finance chief David Zinsner told Reuters in an interview.<\/p>\n<p>&#8220;They were all a little bit caught off guard,&#8221; Zinsner said.<\/p>\n<p>During the conference call with investors, Zinsner said that despite owning its own factories, Intel faces a lag time in changing the types of chips it makes and that the company was not managing its factories with the expectation that data-center demand would change.<\/p>\n<p>External investment boosts Intel shares after 2024 slumpTWO CUSTOMERS ENGAGED ON CONTRACT MANUFACTURING<\/p>\n<p>After years of missteps left Intel struggling in \u2060the fast-growing AI chip market and drained its finances, Tan has engineered a turnaround strategy centered on cutting costs and eliminating management layers, while championing a fresh product road map.<\/p>\n<p>Intel has held off on investing heavily \u200din its next-generation manufacturing process known as 14A, while waiting for a large customer, Zinsner said. Like its rivals in the foundry business, Intel is tight-lipped about its customers, but Zinsner said investors will be able to tell when it \u200cwins a customer \u200cby looking for a spike in capital spending.<\/p>\n<p>Tan said on the conference call that two customers were evaluating the technical details of the 14A technology, a possible step toward creating test chips with it. Intel executives said they expect to know by the second half of this year whether external customers want to use the technology.<\/p>\n<p>Zinsner said the company also believes that its capital expenditure could stay steady, versus previous expectations that it would decline.<\/p>\n<p>With a slew of high-profile investments in Intel last year &#8211; a <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/asia-pacific\/nvidia-bets-big-intel-with-5-billion-stake-chip-partnership-2025-09-18\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">$5 \u202fbillion<\/a> investment from Nvidia, <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/business\/media-telecom\/intel-gets-2-billion-lifeline-form-softbank-equity-investment-2025-08-19\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">$2 \u202fbillion<\/a> from SoftBank <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/markets\/companies\/9984.T\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">(9984.T), opens new tab<\/a> and a U.S. government <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/business\/us-take-10-equity-stake-intel-trumps-latest-corporate-move-2025-08-22\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">stake<\/a> in the company &#8211; investors&#8217; confidence in the company&#8217;s revival has been high.<\/p>\n<p>&#8220;For investors, the key insight is that \u2060Intel&#8217;s turnaround story remains supply-constrained rather than demand-constrained; a \u2060frustrating position that delays the financial recovery despite \u200bcompetitive products and strong customer interest,&#8221; Running Point Capital&#8217;s chief investment officer, Michael Schulman, said.<\/p>\n<p>Tan has also significantly pared back contract manufacturing ambitions promoted by his predecessor, Pat Gelsinger, in an effort to shore up Intel&#8217;s balance sheet after capital-intensive expansions pummeled margins.<\/p>\n<p>After a more than 60% drop in its share price in 2024, Intel&#8217;s stock gained 84% in 2025, far outperforming the benchmark semiconductor index&#8217;s <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/markets\/quote\/.SOX\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">(.SOX), opens new tab<\/a> 42% rise.<\/p>\n<p>The company has started shipping its new &#8220;Panther Lake&#8221; PC chips &#8211; the first product made using \u200dIntel&#8217;s make-or-break 18A manufacturing technology, and analysts expected the production ramp-up to hurt margins.<\/p>\n<p>Reuters has <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/technology\/nvidia-broadcom-testing-chips-intel-manufacturing-process-sources-say-2025-03-03\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">reported<\/a> that only a small percentage of the chips printed via 18A have been good enough to make available to customers. Intel has said its yields, or the number of good chips per silicon wafer, are improving monthly. Weak yields also routinely pressure margins.<\/p>\n<p>During the conference call, Tan said that 18A yields are in line with Intel&#8217;s internal plans but are &#8220;still below what I want them to be.&#8221;<\/p>\n<p>A global shortage of memory chips \u200bhas boosted the prices of those chips and made personal computers &#8211; a key market for Intel &#8211; more expensive. Zinsner said in \u200da statement that he expects available supply to be at its lowest levels in the first quarter, and improve in the second quarter.<\/p>\n<p>Intel has also been consistently losing share in the PC market to rival AMD <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/markets\/companies\/AMD.O\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">(AMD.O), opens new tab<\/a> and chip blueprint designer Arm Holdings .<\/p>\n<p data-testid=\"SignOff\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__extra_small__8Buss body-module__full_width__kCIGb body-module__extra_small_body__Bfz20 sign-off-module__text__LQAMP\">Reporting by Arsheeya Bajwa in Bengaluru and Max A. Cherney in San Francisco; Additional reporting by Stephen Nellis and Noel Randewich in San Francisco; Editing by Sayantani Ghosh and Matthew Lewis<\/p>\n<p data-testid=\"Body\" dir=\"ltr\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__element__5eCce article-body-module__trust-badge__5mS3f\">Our Standards: <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.thomsonreuters.com\/en\/about-us\/trust-principles.html\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__medium__2Rl30 text-module__small__sph8i link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n<p><a href=\"https:\/\/www.reutersagency.com\/en\/licensereuterscontent\/?utm_medium=rcom-article-media&amp;utm_campaign=rcom-rcp-lead\" target=\"_blank\" dir=\"ltr\" class=\"button-module__link__A3sD0 button-module__secondary__70gBu button-module__round__QDFgq button-module__w_auto__Sem-F\" data-testid=\"LicenceContentButton\" rel=\"nofollow noopener\">Purchase Licensing Rights<\/a><a data-testid=\"AuthorBioImageLink\" class=\"author-bio-module__author-image__jcaG3\" href=\"https:\/\/www.reuters.com\/authors\/max-a-cherney\/\" referrerpolicy=\"no-referrer-when-downgrade\" tabindex=\"-1\" rel=\"nofollow noopener\" target=\"_blank\"><\/a><\/p>\n<p data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__extra_small__8Buss body-module__base__o--Cl body-module__extra_small_body__Bfz20 author-bio-module__description__9ynkB\">Max A. Cherney is a correspondent for Reuters based in San Francisco, where he reports on the semiconductor industry and artificial intelligence. He joined Reuters in 2023 and has previously worked for Barron\u2019s magazine and its sister publication, MarketWatch. Cherney graduated from Trent University with a degree in history.<\/p>\n","protected":false},"excerpt":{"rendered":"CEO Tan focuses on cost-cutting and new product road map Intel&#8217;s new manufacturing tech faces yield challenges, affecting&hellip;\n","protected":false},"author":2,"featured_media":298557,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[261],"tags":[291,82519,82793,289,290,82499,36586,84105,8535,84433,82500,82530,82531,82529,82779,18,45748,87651,19,17,87207,82565,82524,82507,82780,82510,82998,83003,82994,82512,84338,84457,753,82,82999,30150,82534,82533,107],"class_list":{"0":"post-298556","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-amers","10":"tag-arti","11":"tag-artificial-intelligence","12":"tag-artificialintelligence","13":"tag-bact","14":"tag-biz","15":"tag-blr","16":"tag-chip","17":"tag-chip1","18":"tag-cmpny","19":"tag-destocabsm","20":"tag-destousbsm","21":"tag-destoustcm","22":"tag-destoustpm","23":"tag-eire","24":"tag-gen","25":"tag-hot","26":"tag-ie","27":"tag-ireland","28":"tag-mtgfx","29":"tag-mtpix","30":"tag-namer","31":"tag-news1","32":"tag-packageus-top-news","33":"tag-publ","34":"tag-res","35":"tag-resf","36":"tag-rulesresults","37":"tag-sci","38":"tag-semi","39":"tag-stx","40":"tag-tech","41":"tag-technology","42":"tag-teeq","43":"tag-tmt","44":"tag-topcmb","45":"tag-topnws","46":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115941534791043462","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/298556","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=298556"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/298556\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/298557"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=298556"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=298556"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=298556"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}