Shares of Intel tumbled 11% to ARS 29,420 on Wednesday, extending a punishing week that has now erased roughly 19% of the stock's value since October 6. The immediate catalyst: an explosion and fire at the company's fabrication plant in Kiryat Gat, Israel, that seriously injured workers — layered on top of a broader semiconductor rout driven by sticky inflation and fresh fears that interest rates will stay higher for longer. A Fatal Explosion, a Foundry Under Siege, and a Chip Selloff — Is Intel's Turnaround Story Cracking?
Shares of Intel plunged 11% to ARS 29,420 on Wednesday, capping a brutal stretch that has wiped roughly 19% off the stock in just over a week. Three blows landed almost simultaneously: a deadly factory explosion in Israel, reports that a marquee customer may shift chip production to a rival, and a macro selloff punishing the entire semiconductor sector.
A Worker Killed and a Key Factory Shut Down by a Gas Blast
A blast at Intel's factory in Kiryat Gat on Wednesday killed one worker and seriously injured two others, with police saying a gas cylinder appeared to have exploded.
Sources said the explosion was caused by a truck carrying nitrogen trifluoride, a highly toxic gas used in semiconductor manufacturing.
The Kiryat Gat site is one of Intel's key manufacturing facilities, housing Fab 28 — which makes processors and other chips — and is adjacent to Fab 38, a major expansion project.
Together with Intel's Arizona plant, Fab 28 produces a significant share of Intel's chips and is regarded internally as one of its strongest fabs. Any prolonged shutdown would directly squeeze output ahead of Intel's October 29 earnings report.
A Big Potential Customer May Choose Intel's Rival Instead
Intel experienced sharp downward momentum as reports indicated that Elon Musk's Terafab initiative is in talks with TSMC for dedicated chip production. Investors had previously anticipated that Intel's foundry services would capture significant manufacturing volume for Terafab's AI and automotive workloads. Losing that business would undercut the central pitch that Intel can become a contract manufacturer for major tech companies — the very narrative underpinning its stock's 194% gain over the past year.
The Macro Backdrop Makes Everything Worse
September CPI data came in higher than expected, igniting rate-hike concerns and a broad U.S. stock decline.
The selling is hitting the non-AI names hardest, with Intel off 5.9% against Nvidia's 3% on the U.S. exchange — a sign the market sees Intel as more vulnerable. Higher borrowing costs threaten the massive capital spending Intel needs: it carries roughly $48.5 billion in long-term debt , and its foundry division reportedly posted an operating loss near $2.1 billion, while a separate noncash charge contributed to an $11 billion net loss.
What Investors Should Watch Next With earnings two weeks away, Intel faces a credibility test. The Kiryat Gat incident raises immediate questions about production continuity; the Terafab defection threatens the long-term foundry thesis. Analysts maintain an average "Hold" rating with a consensus target of $109.06 — well above today's trading level, but predicated on a turnaround story that just got materially harder to believe.