Intel Corp., the largest maker of computer processors, dragged down chip industry stocks after executives said a weaker economy will affect demand and hurt financial performance.

“I think on the macro side, clearly, it’s weaker,” Chief Financial Officer Dave Zinsner said Tuesday at a Bank of America conference. “That’s clearly going to impact us, as it will virtually everybody else in not only the semiconductor industry but globally in terms of corporations.”

Zinsner’s comments added to concern that booming demand for semiconductors and electronics in general is going to be slowed by inflation and weaker consumer and corporate spending. Zinsner declined to update the company’s projections for the second half of the year, forecasts that some analysts had already projected were too optimistic. 

The Santa Clara, California-based company’s products are the heart of the majority of the world’s personal computers and are the key component in most of the servers that run data centers and corporate networks. 

Intel shares fell 5.3 per cent to US$41.23 at Wednesday’s close in New York, the lowest price since October 2017. Intel’s drop paced declines by semiconductor industry stocks. Advanced Micro Devices Inc. dropped 3.2 per cent while Nvidia Corp. fell 1.5 per cent. The Philadelphia Stock Market Semiconductor Index declined 2.4 per cent. 

In April, Intel gave a disappointing second-quarter sales and profit forecast, indicating weaker demand for all types of its semiconductors. PC chip revenue dropped in the first quarter as some customers cut orders to reduce unsold inventory and consumers bought fewer devices for education purposes, Intel said at the time. Nonetheless, Intel executives stuck by annual projections arguing that demand would improve in the second half of the year. 

“I think we’ll wait to give a firm number when we get all the data for this quarter,” Zinsner said at the conference. “At this point, I would just say it’s gotten a lot noisier than it was even a month ago.”