'Not able to meet demands': Intel CEO admits company failed to meet market needs

CEO of Intel Lip-Bu Tan on Thursday addressed investors and said that he’s disappointed that “we are not able to fully meet the demand in our markets.” The giant which excels in chip making reported a major loss of over  $333 million and warned of other major losses and shortage of chip supply and heavy spending ramp up the production process.

The Santa Clara-based company's revenue fell 3.9 per cent year-over-year to $13.7 billion, missing analyst expectations.

The chip making giant struggles as Intel shares plunged more than 12 per cent in after-hours trading as investors absorbed the disappointing results and a gloomy first-quarter forecast calling for revenue between $11.7 billion and $12.7 billion.

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The company’s CFO David Zinsner pointed to "industrywide supply shortages" weighing on results, but also acknowledged Intel's own missteps.

Intel has underestimated the demand for CPUs and AI data centres. The crunch in the supply is worsening, its growth in the first quarter, Zinsner said. 

The company also disappointed analysts by providing no updates on customers for its next generation 14A manufacturing technology, stating it won't invest in factory capacity until securing a customer commitment.

Despite recent momentum—Intel shares had surged more than 150 per cent over five months following government investment and a new partnership with Nvidia—the company continues making what analysts call "unforced errors." 

"We are on a multiyear journey. It will take time and resolve," Tan told analysts on the earnings call.