Intel Sees PC Market Slowdown, $300 Million Revenue Hit From Israel Plant Shutdown

07:01 AM EDT, 10/30/2026 (MT Newswires) -- Intel (INTC) expects the personal computer market to weaken amid rising memory prices and supply constraints, while a shutdown at its chipmaking facility in Israel is projected to reduce fourth-quarter revenue by about $300 million. The PC market is weakening after remaining resilient in the first half of the year, Chief Financial Officer Dave Zinsner said during a late Thursday third-quarter earnings call, according to a FactSet transcript. "We do not expect a sustained recovery until memory availability improves and pricing begins to normalize," Zinsner told analysts. Shares of the company fell 26% in Friday's most recent premarket activity. The stock has gained about 150% so far this year. Intel expects the 2026 PC unit total addressable market to decline about 12%, with second-half shipments down more than 20%, Zinsner said. For 2027, the chip maker is planning for the total addressable market to be down 10%, with the annual decline to be more pronounced in the first half, the CFO added. The company projects revenue in its client computing and physical artificial intelligence group to decline more than 20% sequentially in the fourth quarter, as customers work to clear weeks of inventory and align purchases with expectations for next year's consumption, Zinsner added. In the third quarter, the segment's revenue decreased 5% year over year to $8.1 billion, weighed down by industry-wide impacts from higher memory prices and limited IT budgets, Chief Executive Lip-Bu Tan said on the call. "Our longer term view of the PC market remains unchanged," Zinsner told analysts. "Traditional PCs will play an important role in enabling AI applications and driving strong returns on AI infrastructure spending." During the call, Tan said an accident earlier this month led to an extended shutdown at the company's factory in Israel, which will impact its 10-nanometer server product shipments in the fourth quarter. The disruption at the Fab 28 factory is estimated to be a roughly $300 million headwind to revenue and impact Intel's gross margin by 200 basis points in the quarter. Truist Securities said in a Thursday note that the accident will add to capacity constraints limiting upside for Intel's data center and AI business over the next one to two quarters. The brokerage cut its price target on Intel to $72 from $108 and kept a hold rating. Intel expects overall revenue to be in a range of $15 billion to $16 billion and adjusted earnings to come in at $0.25 a share for the fourth quarter. The consensus on FactSet is for non-GAAP EPS of $0.38 and sales of $16.72 billion. For the third quarter, adjusted earnings increased to $0.52 per share from $0.23 a year earlier, exceeding analysts' estimates of $0.41. Revenue advanced 21% to $16.51 billion but fell short of Wall Street's expectation of $16.56 billion. The chipmaker is still targeting $20 billion in capital expenditures, with next year's spending to be "up strongly," Zinsner said. "Despite this increase in capital spending and working capital, we remain committed to deleveraging in 2027." Rival chip manufacturers Nvidia (NVDA), Advanced Micro Devices (AMD) and Qualcomm (QCOM) are expected to release their latest quarterly results next month, while iPhone maker Apple (AAPL) is scheduled to post its earnings on Monday.