Intel plunges 14% after saying its next-generation chips will come out 6 months later than expected
- Intel reported quarterly earnings on Thursday that beat Wall Street expectations for revenue and earnings per share.
- But the company also said the release of its next-generation chips would be delayed by six months.
- Shares of the company fell 14% on Friday.
- The company also gave a weaker-than-expected third quarter guidance.
- Read more on Business Insider.
Shares of Intel plunged more than 14% in early trading Friday in the US after the company said that the release of its next-generation chips would be delayed by six months.
The announcement came during Intel's second-quarter earnings results, released Thursday. The company reported earnings per share and revenue that beat Wall Street's expectations.
"We are seeing an approximate six-month shift in our 7nm-based CPU product timing relative to prior expectations," Intel CEO Bob Swan said in a statement. "The primary driver is the yield of our 7nm process, which based on recent data, is now trending approximately twelve months behind our internal target. "
He continued: "We have identified a defect mode in our 7nm process that resulted in yield degradation. We've root-caused the issue and believe there are no fundamental roadblocks, but we have also invested in contingency plans to hedge against further schedule uncertainty."
Intel had previously said that its 7-nanometer chips would launch in 2021.
In addition to the delay in releasing the 7-nanometer chips, Intel offered a weaker-than-expected guidance for its third quarter earnings results. The company foresees adjusted earnings per share of $1.10 on $18.2 billion in revenue, where analysts had expected slightly higher EPS.
Shares of rival chipmaker Advanced Micro Devices climbed 8% in premarket trading Friday on the news.
Intel had risen 1% year-to-date through Thursday's close.