Intel Corp shares descended strongly amid investors’ concerns over the financial liability as well as the vulnerability of processors divulged lately.
Thursday last week witnessed Intel Corp – the world’s largest chipmaker – admit their flaws on microprocessors, which enable hackers to steal important information from mobile devices and computers. Large software makers have rushed to develop patches in a bid to guard versus the vulnerabilities.
This issue may cause Intel a big loss as the company has to spend to curb lawsuits claiming that computers will decelerate once the patches are installed, forcing customers to buy stronger hardware.
“The potential liability is big for Intel,” appraised Eric Johnson, dean of Vanderbilt University’s Owen Graduate School of Management. “Everybody will be scrambling over the next few days to figure out just how big it is.”
In fact, many large technology companies show no discomposure on the potential issues that the patches can cause. Amazon Web Services - a subsidiary of Amazon.com that provides on-demand cloud computing platforms – reported that there will be minimal impact for customer workloads, while both Microsoft and Alphabet Inc said they expected few troubles for their cloud computing customers.
Nevertheless, Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, gauged that this disaster could pressurize Intel, forcing the company to reduce chips’ prices. “What (Intel’s cloud customers) are going to say is, ‘You wronged us, we hate you, but if we can get a discount, we’ll still buy from you,” he said. The analyst also forecasts that the world’s leading chipmaker will have to spend more on chip development in an effort to increase security.
What makes the incident worse is that there were many security experts and government agencies saying they didn’t know about the serious cyber attacks aiming to the vulnerabilities.
Large financial services firms are finding methods to obturate the flaws, while banks are trying to calculate the costs to cope with the issue.
Worries about reputational hit have weighed hard on Intel shares’ prices. Last Thursday recorded a fall of nearly 2%, following a 3.4% decline the day before. Meanwhile, Advanced Micro Devices’ shares mounted more than 5% because of prediction that the No. 2 maker of microprocessors may pull Intel’s customers.