Deadly Intel Fab 28 explosion causes two-week shutdown, to cost $600 million and severely disrupt server chip manufacturing for six months — 10nm Xeon shipments stall during largest shortage in memory

What happened

The explosion at Intel's Fab 28 near Kiryat Gat, Israel , that happened earlier this month forced Intel to shut down the whole facility for two weeks, and now the company expects that it will cost it approximately $600 million in lost revenue over two quarters. The disruption is expected to affect server processors manufactured using Intel's 10nm-class process technologies and will reduce the company's shipments in both the fourth quarter of 2026 and the first quarter of 2027.

The explosion occurred in mid-October, killed two, seriously injured one, and caused an extended shutdown of Fab 28, one of Intel's key manufacturing facilities for chips produced using its 10nm-class and Intel 7 process technologies (Intel 7 was formerly called 10nm Enhanced SuperFin). Latest Videos From Tom's Hardware Watch full video here: Intel has not identified the affected Xeon processor families, disclosed the number of wafers damaged, or specified when Fab 28 will return to full production capacity after it restarts this Friday.

Intel expects the incident to reduce its Q4 2026 revenue by approximately $300 million, and a similar impact is anticipated in Q1 2027. The company also expects the accident to reduce its fourth-quarter non-GAAP gross margin by approximately 2%.

Furthermore, Intel continues to sell previous-generation Xeon 5 Emerald Rapids (and even Xeon 4 'Sapphire Rapids', though it stopped accepting orders on these CPUs (the general-purpose processor at the centre of a computer) in late September) that are made on Intel 7 manufacturing technology. In addition, other fabs (a chip factory) may lack product-specific manufacturing qualifications, or the time and costs required to transfer production between facilities are too high, keeping in mind that Fab 28 is about to restart.

In addition to lost production time, Intel faces potential losses from wafers that were undergoing fabrication when the accident occurred.