Intel says new chip technology is six months behind, shares drop 6%

By Stephen Nellis and Munsif Vengattil

(Reuters) - Intel Corp said on Thursday its new 7-nanometer chip technology was six months behind schedule, sending its shares down 6% in extended trading.

The company estimated third-quarter revenue of about $18.2 billion on adjusted earnings of $1.10 per share, compared with analysts' average forecast of $17.9 billion and $1.14 per share, according to IBES data from Refinitiv. It updated its full-year 2020 revenue guidance to $75 billion versus analysts' consensus estimate of $73.86 billion, according to Refinitiv data.

The new delays are a blow for the Santa Clara, California-based chipmaker, which struggled with years of delays for its current 10-nanometer chips. Intel is the top supplier for processors for PCs and data centers, but rivals such as Nvidia Corp and Taiwan Semiconductor Manufacturing Co Ltd <2330.TW> are challenging the logic of Intel's business model as a designer and maker of its own chips.

In recent years, Intel has relied on booming growth in data centers that power cloud computing as PC sales declined, though both segments have expanded as the pandemic forced increased technology spending to facilitate working from home.

For the second quarter ended in June, Intel said overall revenue and adjusted profits were $19.73 billion and $1.23 per share, compared with analysts' estimates of $18.55 billion and $1.11 per share, according to Refinitiv.

Revenue for its data center segment was $7.1 billion compared to estimates of $6.61 billion, according to data from FactSet. Sales for PC chips were $9.5 billion, compared to analyst estimates of $9.10 billion, according to FactSet data.

(Reporting by Stephen Nellis in San Francisco and Munsif Vengattil in Bengaluru; Editing by Anil D'Silva and Richard Chang)

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