Intel (NASDAQ:INTC) shares slipped in US premarket trading Friday following a report by the Wall Street Journal indicating a delay in the company's plans for a $20 billion chip facility in Ohio.
The report has raised concerns regarding Intel's capital expenditure strategies. However, analysts have largely downplayed the severity of this delay, suggesting it does not signal impending cuts to capital spending.
Shares fell 1.4% in pre-open trade.
Cantor Fitzgerald analysts commented that Intel's postponement of its Ohio investment is not indicative of a broader reduction in wafer fabrication equipment (WFE) spending for equipment vendors.
The broker highlighted that Intel has already placed orders for equipment to be used in fabs outside of Ohio, with no alterations to these plans.
“Is this an issue with the process roadmap (20A, 18A etc?) Our inclination is to say probably not,” analysts said in a note.
“We doubt the news signifies any rapid changes to plans, and assume recent capex commentary offered up on the earnings call a week or two back would have already contemplated any changes,” they added.
“But the delay does likely signify a structural reset in the company’s forward revenue expectations, at least for now.”