Intel: shares fall after 7nm chip delay

(CercleFinance.com) - Intel last night reported better-than-expected results, but focus instead turned on the chipmaker's surprising announcement that its 7nm production platform will be delayed.


In its earnings release, the Santa Clara-based company said its 7nm-based CPU product timing is now delayed by approximately six months relative to prior expectations.

The primary driver is the yield of Intel's 7nm process, which is now trending approximately twelve months behind the company's internal target.

The delay is worrisome to investors, with some analysts wondering if Intel's business model has been broken.

"Investors are again concerned Intel could face a repeat of its 10nm struggles putting it well behind competitors (e.g., AMD)," Wedbush Securities wrote in a note this morning.

"We have previously argued that Intel's design-for-manufacturing process was permanently handicapped by the exodus of a dozen, talented execs that shepherded that process over the previous 20-40 years", Jefferies added.

"As a result, we believe it is increasingly likely that Intel goes fabless," the broker pointed out.

The shares were taking a battering - down 14% on the New York Stock Exchange in early morning trading.

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