Intel's Fab 28 near Kiryat Gat will cost the company roughly $600 million in lost revenue across the fourth quarter and the first quarter of 2027 after an explosion earlier this month killed two workers and forced a two-week shutdown. The facility produces chips on Intel's 10nm-class and Intel 7 process nodes, and the hit falls almost entirely on server processors at a moment when Intel says it cannot meet demand elsewhere.
The numbers are specific and concentrated
Chief financial officer Dave Zinsner told analysts on the earnings call that the incident will shave about $300 million from Q4 revenue and a similar amount from Q1. The non-GAAP gross margin takes a 2 percentage-point hit in the fourth quarter because most of the wafer write-offs from work-in-progress inventory land in that period. Zinsner said "almost all of the $300 impact from Fab 28 is related to 10nm server products." The plant is expected to restart production by the end of this week, but Intel has not said when it will return to full capacity.
The bottleneck is not capacity but qualification
Intel lists five fabs capable of 10nm-class manufacturing across Arizona and Israel, yet it says it cannot simply shift the lost output. The company has already done what it can to adjust manufacturing at the other sites. Other fabs may lack product-specific qualifications, and the time and cost to transfer production are prohibitive given that Fab 28 is restarting imminently. Intel also will not repurpose the I/O die lines that feed its newest Xeon 6 processors to cover previous-generation Xeon 5 or Xeon 4 shortfalls.
Xeon 6 exposure runs through the I/O die
The latest Xeon 6 uses compute dies made on Intel 3, but the I/O dies still come from Intel 7, the very node Fab 28 serves. Older Xeon 5 Emerald Rapids and Xeon 4 Sapphire Rapids run entirely on Intel 7. Intel stopped taking orders for Sapphire Rapids in late September, but it continues to sell both prior generations. The company has not identified which specific Xeon families will see reduced shipments, nor has it disclosed the number of wafers damaged.
Client chips remain an open question
Intel uses Intel 7 for its 12th, 13th, and 14th Generation Core client processors, including Raptor Lake. The company has not said whether Fab 28 manufactures any of those parts or whether the other fabs can absorb the difference. With server demand already stretching the network, the silence on client exposure is notable.