Stocks of microchip manufacturers fell across the board after Intel (INTC), the world’s biggest
computer processor company, said a weakening global economy will hurt demand and its
financial performance.
“I think on the macro side, clearly, it’s weaker,” Intel Chief Financial Officer (CFO) Dave Zinsner
said at a conference. “That’s clearly going to impact us, as it will virtually everybody else in not
only the semiconductor industry but globally in terms of corporations.”
The comments added to concern that booming demand for semiconductors and electronics in
general is going to be slowed by inflation and weaker consumer and corporate spending.
Santa Clara, California-based Intel’s products are the heart of the majority of the world’s
personal computers and are the key component in most of the servers that run data centers and
corporate networks.
Intel shares fell 5.3% to $41.23 U.S. after the comments were made, dropping the stock to its
lowest level since October 2017. Other semiconductor stocks also fell, with Advanced Micro
Devices (AMD) dropping 3.2% and Nvidia (NVDA) declining 1.5%.
In April, Intel gave a disappointing second-quarter sales and profit forecast, indicating weaker
demand for all types of its semiconductors and microchips. Personal computer chip revenue
dropped in the first quarter as some customers cut orders to reduce unsold inventory and
consumers bought fewer devices for education purposes, Intel said at that time.
Nonetheless, Intel stuck with its annual projections after its first quarter earnings, arguing that
demand would improve in the second half of this year.
Intel stock has fallen 23% this year to $41.23 U.S. a share.
