Intel forecasts gloomy quarter on supply-chain woes, shares fall

As lockdowns in China continue, supply-chain bottlenecks are likely to hurt Intel's customers, in turn affecting the chipmaker's business.

Chipmaker Intel Corp forecast second-quarter revenue and profit below Wall Street expectations on Thursday on worries of weak demand in its largest end market, PCs, and increased supply-chain uncertainty due to COVID-19lockdowns in China.

(Sign up to our Technology newsletter, Today’s Cache, for insights on emerging themes at the intersection of technology, business and policy. Click here to subscribe for free.)

Shares of the company fell 5% in after-market trading.

Rising inflation, resurgence of COVID-19 in China and uncertainties around the war in Ukraine have shifted consumer spending away from gadgets, hurting Intel. More than half of its revenue last year came from the segment selling processors for PCs.

"We are expecting that Shanghai does open up fairly soon, but that does moderate our outlook a little bit on Q2," IntelCEO Pat Gelsinger told Reuters. "It doesn't change any perspective on the year, which we think as we go into the second half, you have more PC demand."

The first quarter beats help Intel meet its full-year revenue outlook, he added.

As lockdowns in China continue, supply-chain bottlenecks are likely to hurt Intel's customers, in turn affecting the chipmaker's business.