Intel shares fell nearly 18% on Thursday, Oct. 29, after the chipmaker forecast its weakest sales quarter of the year. The plunge lands squarely on Hillsboro, home to Intel's largest research campus and about 16,000 Washington County workers.

The stock dropped $16 in after-hours trading to $76.07, its lowest point since April, The Oregonian reported. Intel projected fourth-quarter sales between $15 billion and $16 billion.

Two problems drove the sell-off.

Intel can't make enough of its high-end Xeon server chips to meet surging demand from artificial intelligence systems. The company didn't anticipate how quickly AI workloads would shift toward the conventional processors Intel builds, and now risks losing market share to rivals who don't face the same capacity limits.

At the same time, AI is consuming memory chips from other manufacturers, pushing memory prices up and dragging down demand for personal computers. Intel said it expects the PC slowdown to continue at least until next summer.

"Our immediate priority is to unlock additional supply to meet extraordinary demand for our Xeon family, while strengthening our product portfolio and roadmap," CEO Lip-Bu Tan said.

Israel explosion adds $300 million hit

An explosion at Intel's chip factory in Kiryat Gat, Israel, on Oct. 14 compounded the pressure. Intel told Reuters the blast shut down production for two weeks and will cost $300 million in sales during the current quarter, The Oregonian reported.

Two workers were killed and a third was seriously injured. All three suffered burns, and the surviving worker remained hospitalized, sedated and on a ventilator, according to Soroka Medical Center as reported by DataCenterDynamics. Israeli police suspected a gas cylinder malfunctioned while being unloaded from a truck, according to reports cited by DataCenterDynamics.

Intel declined to say whether the workers were direct employees, contractors or outside vendors. The company said it is cooperating with Israeli investigators and supporting the workers' families.

Strong Q3 overshadowed

The grim outlook eclipsed what had been a solid quarter. Intel reported third-quarter sales of $16.5 billion, at the top of its forecast range and its highest quarterly revenue since 2022. Profits totaled $3.3 billion, or 60 cents a share.

Chief Financial Officer David Zinsner said the company would continue making "disciplined investments in capacity and working capital to increase supply …" and support future growth.

What it means for Hillsboro

Intel is Oregon's largest corporate employer. The company eliminated about 6,000 Oregon jobs in 2024 and 2025, dropping from roughly 22,000 workers to about 16,000, Oregonian reporter Mike Rogoway said in a June interview on KLCC.

Rogoway noted in that interview that Intel had shelved a planned expansion of its D1X research facility in Hillsboro after sales stalled, with no indication the project would restart soon.

For the roughly 16,000 workers who remain, the stock price matters directly. Part of Intel employee compensation comes through stock grants and options. When the stock sat near $20 a share in prior years, many of those options were worthless, Rogoway said.

Intel has given no public indication it plans to proceed with the shelved D1X expansion. The Xeon supply bottleneck and the PC slowdown Intel expects through next summer will shape what comes next for the company's largest research hub.