Chipmakers Pandemic Boom Turns To Bust With Recession Loomin
BloombergAug 16, 2022
Shares of US semiconductor chipmaker Intel Corp sank more than 6.4% on Friday and wiped about $8B off its market value, in a loss that analysts have classified as "historic."
The crash comes after Intel on Thursday reported a 32% year-over-year revenue decline and a net loss of $664M for the fourth quarter of 2022.
The pandemic bubble has officially burst. During COVID, the semiconductor firms enjoyed a massive run-up in orders, sending sales and stock prices to record highs. Due to post-pandemic inflation and rising interest rates, chipmakers are finally bracing for the worst downturn in decades, massive erosion of market value, and a bleak future.
Turnarounds are hard work, but Intel will bounce back. Despite the pessimism of some, the tech giant still dominates the markets for PC and server processing chips, is delivering new products, and its manufacturing is ramping up. With some of the largest inventory corrections planned, Intel will regain momentum and stabilize.