Deadly Intel Fab 28 explosion to cost $600 million and disrupt server chip output

What happened

An explosion at Intel's Fab 28 in Kiryat Gat, Israel, in mid-October killed two people and seriously injured another. The facility was shut down for about two weeks, and Intel plans to restart production toward the end of the week.

What it will cost

Intel CFO Dave Zinsner said on the company's earnings call that the disruption will cost roughly $600 million in lost revenue spread over two quarters. About $300 million falls in Q4 2026, with a similar impact expected in Q1 2027. Intel also expects the accident to shave about 2 percentage points off its fourth-quarter non-GAAP gross margin.

Which products are affected

Fab 28 is a key site for chips made on Intel's 10nm-class and Intel 7 (formerly 10nm Enhanced SuperFin) processes. Zinsner said almost all of the $300 million impact relates to 10nm server products. While the latest Xeon 6 processors use compute dies built on Intel 3, their I/O dies still come from Intel 7. Previous-generation parts such as Xeon 5 Emerald Rapids are also made on that node.

Why other fabs can't fully compensate

Intel has other 10nm-capable fabs, including sites in Arizona, but demand for server processors is strong and shifting production is complicated by product-specific qualifications and cost. Wafers that were in production during the accident may also be unrecoverable, with most write-offs expected in Q4.

Consumer impact unclear

Intel has not said whether the shutdown affects client processors made on Intel 7, including 12th, 13th and 14th Gen Core chips such as Raptor Lake. It is unclear whether Fab 28 makes any of these products, so some consumer CPU availability could also be affected.