Despite announcing better than expected second quarter results last Thursday (23 Jul), shares in the chipmaking giant Intel plummeted more than 16% the following day on the news that shipments of its critical next-generation chips could be delayed at least a year. Meanwhile, shares in its much smaller US rival, Advanced Micro Devices (AMD), gained just over 16% on the same day.
Although Intel’s newly-reinstated full-year guidance still implies annual earnings growth of 4%, the numbers did little to counter investor concerns that the company had not only failed to deliver but was effectively admitting defeat. It’s now looking for an outside partner to make chips incorporating tiny 7-nanometer transistors (the rule of thumb being that the smaller the transistor, the faster and more efficient it is).
Meanwhile, shares in AMD, which already sells 7-nanometer chips, soared 16.5% on Friday (24 Jul).
By Monday (27 Jul) Intel had announced the resignation of its $27m-a-year chief engineering officer, Murthy Renduchintala.