Intel announced its second-quarter 2024 financial report, revealing a significant downturn. The company swung from profit to loss, with revenue and profits falling short of market expectations. Notably, Intel reported a net loss of $1.654 billion. Additionally, the third-quarter performance guidance provided by the company was also below market expectations, leading to a sharp decline in stock prices.

Industry analyst Patrick Moorhead disclosed that Intel CEO Pat Gelsinger admitted during the earnings conference call that Meteor Lake is experiencing production problems. Specifically, the issues are related to yield or back-end production, which has adversely impacted Intel's profit margins in chip manufacturing.

It has been noted that there is significant market demand for Meteor Lake. As a result, Intel is compelled to use a "hot lots" production approach. This method involves the mass production of high-priority chips and their rapid transfer to the front end of the production line for packaging. While this indicates robust demand, it also hikes overall production costs as some wafers might need to be re-processed to ensure Meteor Lake passes quality checks.

The yield issues with Meteor Lake arise from the part of the manufacturing process handled by Intel's OEM, specifically the computing module manufactured using the Intel 4 process. Typically, when multiple chips share a single process node, production costs are distributed, reducing overall operational expenses. However, currently, only Meteor Lake utilizes the Intel 4 process within Intel's product lineup, making it a dedicated and costly endeavor. The pressure to expedite production to meet market demand further escalates costs and affects profit margins.

Previously, Intel also indicated that insufficient packaging capacity has impacted Meteor Lake's supply.