“Worst Sell-Off in Its History”: Intel Shares Plunge 28% After Factory Explosion... 800 Billion Won in Losses

Fab 28 in Kiryat Gat, Southern Israel
A key Intel manufacturing facility since opening in 1999

On October 30 (local time), U.S. semiconductor company Intel plunged nearly 30% during trading. It was the worst sell-off in the company's history since its founding in 1971. In the wake of the Intel shock, other technology stocks, including the Nasdaq and the Philadelphia Semiconductor Index, also struggled.

Intel's semiconductor plant. The photo is not related to any specific content in the article. Intel website.

The Intel shock has been attributed to growth falling short of investor expectations, declining demand in the PC market, and an explosion at Fab 28, one of Intel's manufacturing facilities. Fab 28 is a state-of-the-art semiconductor plant in Kiryat Gat, Israel, and one of the key overseas facilities of the U.S. company.

Intel's Overseas Strategic Hub, Established in 1999... Also Produced the Pentium 4

Although Intel is a U.S. semiconductor company, it also has strategic hubs overseas: Fab 34 in Ireland and Fab 28 in Israel. Both are Intel CPU manufacturing facilities using its latest process technologies.

Fab 28 is located in Kiryat Gat in southern Israel. The city was developed by Jewish immigrants from the former Soviet Union and has since grown into an advanced industrial hub, home to high-tech semiconductor and defense companies, including Intel.

Intel opened Fab 28 in Kiryat Gat in 1999. Initially, the facility manufactured Intel's popular Pentium 4 CPUs and flash memory. As Intel grew into a major semiconductor manufacturer, it invested substantial resources in Fab 28 as well. Intel had planned to mass-produce server CPUs there using a 10-nanometer-class process.

"It Will Be Difficult for Other Factories to Make Up for Reduced Production at One Plant"

Futures and options traders work at the NYSE American exchange in New York on the 30th of last month (local time). Reuters-Yonhap News

However, an explosion at Fab 28 in mid-November disrupted Intel's roadmap. One factory worker was killed and two others were injured. Local media outlets, including The Times of Israel, reported that the accident was caused by a fire involving a specialty gas used in semiconductor manufacturing.

With the production facility damaged, Intel reportedly halted operations at Fab 28 for about two weeks. The damage is estimated at $600 million (about 801.4 billion won). State-of-the-art semiconductors must be manufactured continuously on silicon wafers through a series of complex processes, so any interruption mid-production can trigger enormous cascading losses.

According to IT publications including Tom's Hardware, Intel is also reportedly having to reassess its existing inventory because of scrapped wafers, in addition to losses caused by the factory shutdown.

Intel has four additional fabs in Arizona. The publication noted, "Although there are several fabs that can support the 10-nanometer process, including those in Arizona, this production disruption comes as Intel is struggling to meet demand for server CPUs," adding that "it will be difficult for other factories to make up for reduced production at one plant."

This content was produced with the assistance of AI translation services.