Intel shares plunged about 18% on Thursday after the semiconductor company disclosed that an explosion at its Kiryat Gat, Israel manufacturing facility would cost approximately $600 million in lost revenue over two quarters. The setback comes alongside continued weakness in the PC market, creating a dual challenge for Intel as the semiconductor industry remains under pressure to sustain growth while managing production disruptions.

Israel Factory Disruption Creates Significant Revenue Impact

The October explosion at Intel’s Kiryat Gat fab forced the facility to shut down for approximately two weeks, according to the company. Local media reports said two people were killed and another was seriously injured in the incident.

Intel Chief Financial Officer David Zinsner said the company expects to begin ramping up production at the facility by the end of this week. However, the interruption is expected to have a substantial financial impact, with the company estimating approximately $600 million in lost revenue across two quarters.

The disruption highlights the financial sensitivity of advanced semiconductor manufacturing, where production interruptions can affect supply schedules and revenue even after operations begin returning to normal. For Intel, restoring output will therefore be an important operational priority as it works to limit the longer-term effects of the incident.

Fourth-Quarter Forecast Falls Short of Expectations

Intel also provided a weaker revenue outlook for the fourth quarter. The company expects revenue of $15 billion to $16 billion, compared with an analyst estimate of $17.07 billion cited in the report.

The forecast suggests that the factory disruption is arriving at a difficult point for Intel’s business. The revenue shortfall is not solely an operational issue, however, as the company also faces continuing weakness in the PC market, limiting the potential for a rapid recovery in its traditional business.

PC Weakness Adds to Intel’s Growth Challenge

Intel said the PC slowdown is expected to continue through at least the first half of next year. That outlook adds another layer of uncertainty for a company navigating significant changes across the semiconductor industry.

PC demand remains an important component of Intel’s business, meaning prolonged weakness can constrain revenue growth while the company manages production challenges elsewhere. The combination of softer demand and temporary manufacturing disruption therefore creates pressure on both the top line and the company’s ability to maintain operational momentum.

Investors Focus on Production Recovery

The sharp market reaction indicates that investors are weighing both the immediate financial cost of the factory incident and the broader implications of Intel’s weaker growth outlook. The company’s ability to restore production in Israel as planned will be closely watched, particularly because the estimated $600 million revenue impact extends across two quarters rather than being confined to a single reporting period.

Going forward, the key indicators will be the pace of the Kiryat Gat production ramp-up, the extent of continued PC-market weakness and whether Intel can stabilize revenue after the disruption. The next several quarters will help determine whether the factory incident remains a temporary setback or compounds existing pressure on Intel’s broader growth trajectory.