Intel Shares Down Due to Chip Shortage

Despite high profits, the lack of parts is hurting consumer confidence.

Despite high profits, the lack of parts is hurting consumer confidence.

Computer parts manufacturer Intel is, by all accounts, doing very well for itself right now. The company earned an adjusted $1.71 per share in the most recent financial report, beating out Refinitiv estimates of $1.11 per share. Revenue wasn’t quite as high, coming in at $18.1 billion versus an $18.24 billion estimation, but still more than profitable.

However, in spite of these numbers, Intel’s stock is on the downturn, losing 8% of its value in trading yesterday. According to Intel, the culprit of this stock drop is the ongoing PC chip shortage that has been affecting the entire tech sector for months now. Much of Intel’s revenue is in laptops, but without all of the parts necessary, Intel can’t assemble fresh laptops at the rate they typically do.

“We call it match sets, where we may have the CPU, but you don’t have the LCD, or you don’t have the Wi-Fi. Data centers are particularly struggling with some of the power chips and some of the networking or ethernet chips,” Intel CEO Pat Gelsinger said in an interview with CNBC.

According to Gelsinger, the ongoing demand for PCs is in constant conflict with the lack of parts, which is expected to last until at least 2023. “We’re in the worst of it now, every quarter next year we’ll get incrementally better, but they’re not going to have supply-demand balance until 2023,” Gelsinger said.

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