Intel’s year isn’t getting any better after revealing its 7nm process would be delayed by six months, knocking around 16 percent off its share price and wiping $43 billion off the company’s market cap. Now, Chipzilla is facing a class-action lawsuit for investors fraud.
Intel’s revenue was up 20 percent in its Q2 2020 earnings report, but its 7nm processors have been delayed by at least six months because production has fallen a year behind. The subsequent decline in share price resulted in AMD’s stock jumping above its rival’s for the first time in around 15 years.
On Friday, the Hagens Berman law firm put out a call to Intel investors who suffered significant losses to contact the company for a possible class-action suit. It also seeks people who may be able to assist in its investigation of possible securities fraud.
“Beginning at the Company’s 2019 annual investor conference, Intel continuously represented that it would start shipping its first 7nm chips in 2021. The news was well-received since the Company claimed the 7nm chip would deliver double the area efficiency of its 10nm chips. Moreover, in the wake of severe delays derailing its 10nm chips, Intel assuaged concerns by stating, “We’ve made time-to-market the priority,” and repeatedly affirmed the 7nm chip’s timetable,” states Hagens Berman.
But in its recent earnings call, Intel CEO Bob Swan said the company had identified a “defect mode” in its 7nm process that caused yield degradation issues. As a result, Intel has invested in “contingency plans,” which Swan later defined as including using third-party foundries, all of which means its 7nm chips won’t hit the market until 2021 or 2022.
The law firm is now investigating whether Intel misrepresented and concealed manufacturing and performance issues with its 7nm chips. It’s also asking whistleblowers with non-public information on Intel to get in touch. “Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC,” it states.
Like all billion (and trillion) dollar companies, Intel constantly faces a slew of lawsuits. In addition to alleged patent infringements, the company is dealing with several related to the Spectre/Meltdown vulnerabilities. Misleading investors is a serious allegation, just ask Nvidia, which has been battling against a similar lawsuit—which relates to misreporting mining GPU sales—since 2017.