Intel expects the fatal explosion at its Kiryat Gat fab in Israel to cost roughly $600 million in revenue across the fourth quarter of 2026 and the first quarter of 2027, according to DCD. The CFO described the figure as an early assessment, with about $300 million landing in each quarter.
The site was shut for two weeks, which will affect Q4 shipments of 10-nanometer server parts. Two workers died and one was seriously injured. Local media cited police suspicion of a gas cylinder malfunction during unloading, followed by a nitrogen trifluoride leak. Intel hoped to restart production by the end of the week of the call and was still checking which wafers could be used.
The accident came after a strong quarter for the data center business. Total Q3 revenue was $16.5 billion, up 21 percent year on year. Data center and AI revenue reached $7.3 billion, up 78 percent annually, with operating profit of $3 billion. Intel said Granite Rapids is now its largest server product family, and that demand still exceeds available supply.
That makes the lost output more significant. Management said supply will stay tight through the next quarter and the first half of 2027, partly because added substrate capacity mostly arrives later in the year. The CEO has been in Japan speaking with substrate vendors about supply.
Intel Foundry revenue rose 16 percent quarter on quarter to $6.7 billion, and external foundry revenue was $411 million. The unit's operating loss narrowed to $1.9 billion from $2.1 billion. Yields on Intel 3 and Intel 18A improved, and 18A-P remains on track for launch by year-end. On 14A, the CEO said talks with multiple potential customers were progressing and that Intel could announce a couple in the next two quarters.
Investors focused on other items. Client computing revenue fell year on year, and Q4 guidance of $15 billion to $16 billion was weak, so shares dropped around 20 percent in extended trading. Intel still expects 2027 to be a growth year.
Why it matters: For operators waiting on server CPUs, the fab outage compounds an existing shortage rather than creating a new one. The impact estimate is preliminary and depends on how quickly production resumes and how many wafers are usable.
TwinStack automated analysis, based on reporting by DCD. Check the original for full details.