Intel's stock price plunges 45% in one month; PCs still account for about half of the company's revenue, and foundry customers' confidence is shaken

On the last trading day of October, Intel’s stock plummeted 29% in a single day, marking its worst single-day performance since the 1970s. Over the entire month of October, the stock dropped 45% in total—according to FactSet data, this is Intel’s worst-ever monthly performance. Entering the first trading day of November, the stock fell another 8%.

The trigger was an earnings warning that disappointed Wall Street. Intel warned that its revenue this quarter would be $1–2 billion lower than analysts expected. The reason points directly to the PC market: the persistently high cost of memory and other components, and consumers’ growing unwillingness to upgrade their computers. As the PC business still accounts for about half of Intel’s revenue, this Achilles’ heel was fully exposed.

Just a few months ago, Intel was the market’s darling. In August 2025, the U.S. government took a 10% stake in Intel; Nvidia soon followed, investing $5 billion. Boosted by these events, Intel’s stock price surged sixfold within ten months, reaching a peak in June this year. At that time, the market was full of expectations for Intel’s role in the AI boom—its CPUs were used to power virtual machines needed by agentic AI applications such as Meta’s Muse, offering complementary differentiation to Nvidia’s and AMD’s GPUs.

Now, this narrative has been interrupted by a quarterly warning.

Data Centers: The New Hope, but Capacity Is Already in Crisis

Intel CEO Lip-Bu Tan is not without options. He stated that in the next five years, the global server processor market is expected to grow fivefold from current levels to around $200 billion. In the third quarter of this year, Intel’s data center business grew 78% year-on-year, with revenue reaching $7.3 billion—a strong momentum.

But a problem soon followed: Intel says it cannot make enough chips to meet demand.

Intel attributes this to industry-wide shortages of wafers, substrates, and memory—the very same factors dragging down PC sales.

To “boost capacity” for its data center business, Tan made a rather controversial decision: to shift part of its Oregon plant’s production from the most advanced 18A process to the older Intel 3 process so they can produce more chips for server CPUs.

Shifting 18A Capacity: What Do Foundry Customers Think?

The cost of this decision falls on the foundry business.

The 18A process is Intel’s core technology for attracting external customers. Diverting this capacity directly undermines Intel’s confidence to demonstrate its supply capability to potential clients.

Harvard Business School professor David Yoffie, who served on Intel’s board for nearly thirty years, said bluntly: “They worry that if Intel has no extra capacity beyond its own needs, then it can’t be considered a reliable supplier.”

Yoffie further warns: “If (Intel) cannot find major foundry customers within a year, then the pressure on Intel's economic fundamentals will manifest even more significantly.”

In response, an Intel spokesperson said: “Customer confidence in Intel’s foundry business is built on execution. We are advancing according to our technology roadmap, 18A is demonstrating strong performance, and 14A is progressing steadily. We continue to maintain close engagement with customers and are focused on winning their business through consistent execution.”

A Dilemma: “Competitors Are Also Customers”

The foundry business faces another structural barrier.

Mizuho Securities analyst Jordan Klein pointed out that Intel, as one of the few companies capable of independently manufacturing and packaging advanced chips, “has more control over its own fate” than most chip manufacturers. But he also stressed: “If the capacity isn’t enough, it’s just giving up revenue and profits for nothing.”

Yoffie points out a deeper conflict: chip design companies such as Broadcom and Qualcomm may not want their chips manufactured by a company that also competes with them on the product side. He believes there is only one solution—“to spin off the foundry business. It’s not only the best solution; it may be the only one.”

Klein adds that AMD is probably the only major chip company that proactively does not consider manufacturing at Intel’s foundry, because the two companies compete directly in the CPU market, causing “competition, confidentiality, and privacy concerns.”

Strategic Anxiety in the American Semiconductor Industry

The impact of this crisis has gone beyond just Intel as a company.

From a national strategic perspective, Yoffie cautions: “Ultimately, TSMC’s capacity in the U.S. will only reach 20% to 25% of its global capacity, and it will take years. If the United States does not have a domestic foundry, any geopolitical event—or a supply chain crisis like the COVID-19 pandemic—would spell disaster for the country and for the U.S. semiconductor industry.”

Currently, Intel’s 18A chips have begun mass production in its Arizona plant, with a second factory under construction; a new plant in Ohio has just completed installation of its first structural truss, but the project overall is almost five years behind the original schedule.

Tan states that he will announce “several customers” within the next two quarters. Whether this promise can be fulfilled will be a key sign of whether Intel’s foundry transformation can emerge from its darkest hour.