Intel gives weak forecast after supply shortages hurt sales

Published Fri, Jan 23, 2026 · 06:25 AM

[SAN FRANCISCO] Intel gave a lacklustre forecast for the current quarter because supply shortages are making it harder to meet customer demand, a disappointment for investors who anticipated more of a boost from new products.

First-quarter revenue will be US$11.7 billion to US$12.7 billion, the company said on Thursday (Jan 22). The midpoint of that range fell short of the US$12.6 billion estimated by analysts. The company expects to break even in earnings per share, excluding certain items. Wall Street had projected a profit of eight US cents a share.

Intel is struggling with its manufacturing yields – the percentage of usable chips coming out of its factories – hampering a comeback bid. The once-dominant semiconductor company has spent years trying to restore its technological edge and recover from market share losses, and this is one more setback.

Demand is “quite strong”, and the company is working hard to fix its manufacturing problems, chief executive officer Tan Lip-Bu said. But Intel used up much of its inventory in the fourth quarter, he said.

“Our yield and production manufacturing are not up to my standards,” Tan said. “We need to improve that.”

Intel shares fell about 3 per cent in extended trading on Thursday following the report.

Intel had been riding a wave of Wall Street enthusiasm. Investors poured money into the stock in recent months, betting that new products would further bolster finances. Intel also attracted high-profile investments from the US government, Nvidia and SoftBank Group.

The stock has been the best performer on the Philadelphia Stock Exchange Semiconductor Index this month, adding to an 84 per cent surge in 2025.

In the fourth quarter, revenue fell 4.1 per cent to US$13.7 billion. Profit was 15 US cents a share, excluding some items. Analysts had estimated sales of US$13.4 billion and earnings of nine US cents on average, according to data compiled by Bloomberg.

Despite the optimism, the company still has a long way to go to restore its former chip-industry glory. Its annual revenue of US$53 billion last year was roughly US$25 billion shy of the company’s peak revenue, achieved in 2021.

Earlier this month, Intel announced that the Panther Lake design for processors was now available in devices, with Tan touting their capabilities at the CES trade show in Las Vegas. Intel is locked in a race with rival Advanced Micro Devices and would-be interlopers such as Qualcomm for leadership in what they hope is a new era of AI-capable personal computers.

Intel’s client computing division had revenue of US$8.2 billion last quarter, just missing the average prediction of US$8.3 billion. Data centre sales were US$4.7 billion, compared with a US$4.4 billion estimate.

The Intel Foundry Services division, the company’s factory unit, generated revenue of US$4.5 billion, a gain of 3.8 per cent from a year earlier. That unit currently relies almost exclusively on Intel product divisions for orders, though it is seeking outside clients.

Ultimately, Intel faces an execution challenge, Tan said.

“We are laser-focused as a team to improve that,” he said. “To be candid, it’s just our execution needs to improve.” BLOOMBERG