Intel drops as analyst says Sapphire Rapids seeing 'lower-than-expected demand'
Intel (NASDAQ:INTC) shares fell nearly 2% - near session lows - after a widely watched analyst said on Monday that the company's Sapphire Rapids server chips are seeing "lower-than-expected demand."
TF International Securities analyst Ming-Chi Kuo said on Monday that Sapphire Rapid, which is expected to start mass shipments next quarter, is under pressure as the supply chain was told to cut orders for Intel's (INTC) latest server chip nearly 50% due to weak demand.
Microsoft (NASDAQ:MSFT) was thought to be a major customer of the new chip, which some expect it to contribute "significantly" to Intel's (INTC) profits. Instead, the Redmond, Washington-based tech giant told its supply chain that it had revised orders between 50% and 70% for Sapphire Rapids in the second-half of 2023, Kuo added.
In addition, Kuo explained Microsoft (MSFT) will likely start buying ARM-based server chips from Ampere in the first-half of 2024 and that the company will "gradually reduce its dependence on x86 and be detrimental to Intel's server business."
Intel (INTC) did not immediately respond to a request for comment from Seeking Alpha.
Santa Clara, California-based Intel (INTC) is slated to report first-quarter results after the close of trading on April 27.
Earlier on Monday, UBS said Intel's (INTC) first-quarter results should be "fine" despite the challenging broader environment for IT spending.




Justin Sullivan