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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 The most devastating semiconductor fab disruption in recent history. 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. "In Israel, we have been shut down for about two weeks," said Dave Zinsner, chief financial officer of Intel, during the company's earnings call. "We feel like we are going to be starting up production here by the end of this week." 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). 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%. 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. Although Intel's latest Xeon 6 processors use compute dies produced on Intel 3 fabrication technology, they still use I/O dies fabricated on Intel 7 (aka 10nm ESF) fabrication process. 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 in late September) that are made on Intel 7 manufacturing technology. While Intel has plenty of 10nm-capable fabs — including Fab 12, Fab 22, Fab 32, Fab 42 in Arizona as well as Fab 28 in Israel — the disruption comes as Intel struggles to satisfy strong demand for server processors, so Intel cannot completely offset the lack of output at one facility by adjusting manufacturing at the others (i.e., it has done everything it could by now). For sure, Intel will not repurpose product lines it uses to make I/O dies for Xeon 6 to make previous-generation CPUs. In addition, other fabs 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. The company is assessing work-in-progress inventory to determine which wafers can be recovered and which must be discarded and written off. Zinsner expects most wafer write-offs to occur in Q4 2026, which explains why the gross-margin impact will be concentrated in that quarter despite the disruption to shipments extending into early 2027. Get Tom's Hardware's best news and in-depth reviews, straight to your inbox. "Please note almost all of the $300 impact from Fab 28 is related to 10nm server products," Zinsner said. Although Intel stresses that the shutdown primarily affects its 10nm-class server processors, the company has not disclosed whether the incident will also disrupt shipments of client processors manufactured using its Intel 7 (10nm ESF) process technology. Intel uses this node to manufacture a wide range of client CPUs, including its 12th, 13th, and 14th Generation Core processors, such as Raptor Lake. However, it is unclear whether Fab 28 manufactures any of these products and, if so, whether Intel can compensate for the loss of production by increasing output at its other Intel 7-capable facilities. Consequently, the shutdown could potentially affect the availability of some consumer processors as well. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds. Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends. - bit_user I'm struck by how much that building looks like a castle with a draw bridge! I think that wasn't unintentional. Reply - bit_user Marlin1975 said:And Intels stock is down 50%+ from its high. Down over 25% just today.That's probably a lot more to do with fears of AI bubble and general tech sell-off, in the wake of disappointing earnings from Google and Amazon. Reply - gudomlig What caused the explosion? Something boring and mundane or was it corporate espionage?Reply - bit_user gudomlig said:What caused the explosion? Something boring and mundane or was it corporate espionage?If there were any criminal or national security investigation associated with the incident, I'd hope they would've mentioned it. Industrial accidents happen all the time, sadly. I think that's the most likely explanation, but I'd be interested to learn more, if anyone knows. Here's what the original article said: The Kiryat Gat police commander at the scene laid out the sequence: a blast occurred during a material transfer into the factory’s tanks after one truck had disconnected and another connected. At least eight Fire and Rescue Services teams, including hazmat, searched for trapped people, contained the fire, and monitored the hazardous substance. “At this moment, I cannot point to any suspicion of criminal activity or negligence,” the commander added. Source: https://www.tomshardware.com/tech-industry/semiconductors/two-killed-one-seriously-hurt-in-explosion-at-intels-chip-plant-in-israel-police-suspect-a-gas-cylinder-malfunction-and-the-fire-involved-a-toxic-gas-used-to-clean-chipmaking-tools Reply - vinay2070 This is bad news for Intel and everybody else. We need more competition now that hardware prices are going through the roof on everything.Reply - Araesmojo bit_user said:Industrial accidents happen all the time, sadly. I think that's the most likely explanation, but I'd be interested to learn more, if anyone knows.From a search on Nitrogen Trifluoride (NF3), it's non-flamable or explosive itself in isolation, yet in combination with other materials its a powerful oxidizer and can rapidly cause or exacerbate fires, sparks, and explosions. From this article , it looks like there was a fire between two trucks on site, that then was increased in magnitude by the NF3 onsite. From the location, it looks like it may have hit gas tanks or some other type of fuel reservoir. (Possibly something else flamable, maybe reacted with the rubber on the transport trailer wheels? Something was definitely on fire). https://www.jpost.com/israel-news/article-911777 (The Jerusalem Post) This article (warning, kind of ad-spammy) implies that it was a valve line failure near the neck of a tank rupturing. "preliminary findings suggest the fatal explosion was caused by a technical failure involving the neck of a tank containing eight tons of nitrogen trifluoride (NF3)" https://www.ynetnews.com/article/rypgmdmhze (Y Net News) The design of the trucks on site looks very similar to this design from Ace Gases They have connections at the end stacked in bulk layers, which seems likely what ruptured from the description. https://acegases.com/wp-content/uploads/2023/08/Nitrogen-trifluoride-NF3.png (Ace Gases, IMG link) Reply
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