Intel Shares Plunge 14 Percent as it Fails to Meet AI Chip Demand

JAKARTA - Intel shares fell as much as 14 percent on Friday, January 23. This happened because the company failed to meet the surge in demand for chips for data centers.

This supply problem weighs on investors who expect a quick recovery in the era of Artificial Intelligence (AI). In fact, Intel's shares have experienced a 47 percent rally throughout January this year.

Investor interest has resurged after the US government invested heavily. Major companies such as SoftBank and Nvidia have also provided support to Intel.

Unfortunately, Intel is still unable to catch up with the demand for server processors even though its factories are operating at full capacity. This condition makes Intel lose momentum when the AI chip market is at its peak.

Intel CFO David Zinsner predicts that this supply problem will reach its lowest point in the first quarter. However, he remains optimistic that chip availability will begin to improve gradually after entering the second quarter of this year.

This drastic drop in shares is expected to wipe out Intel's market value by more than $35 billion (Rp586.3 trillion) if the negative trend continues. Intel must now change their production lines to produce the types of semiconductors that the market needs more.

On the other hand, the global shortage of memory supplies also worsened Intel's quarterly profit and revenue projections. The rise in component prices is feared to dampen demand for the personal computer market, which is their largest segment.