Intel Corporation (INTC) shares continued their downward trajectory on Wednesday, following a steep 7.7% drop on Tuesday. This decline stems from a setback in Intel’s contract manufacturing business, with reports indicating that tests conducted on wafers for Broadcom, Inc. (AVGO) have failed. According to Reuters, these tests involved Intel’s 18A manufacturing process on silicon wafers that were sent back to Broadcom last month. Broadcom engineers concluded that the process had not yet reached the necessary level of readiness for high-volume production.
Intel responded to the report by stating that the 18A process is “powered on, healthy and yielding well” and remains on track for high-volume manufacturing next year. However, the company declined to comment on specific customer conversations.
The news comes as Intel faces a challenging year. Its stock has suffered a significant drop in 2024, falling more than 60% year-to-date. This downward trend started in early August after the company reported worse-than-expected second-quarter results and announced a $10 billion cost-cutting initiative.
Despite these setbacks, Wall Street analysts remain cautiously optimistic. The average 12-month price target for Intel is $26.81, suggesting potential upside from current levels. However, the stock’s performance in recent months highlights the uncertainties surrounding Intel’s future. While analysts recognize the potential for growth, the recent setbacks raise questions about the company’s ability to regain its momentum in the semiconductor market.
It remains to be seen whether Intel can overcome these challenges and regain investor confidence. The company’s ability to address the issues with its 18A manufacturing process and regain its competitive edge will be crucial in determining its future trajectory.
