Fitch Ratings downgraded Intel’s credit rating by one notch to BBB from BBB+ on Monday, citing weakening demand, stiff competition, and execution risks. The agency also assigned a negative outlook, signaling potential further downgrades if the chipmaker fails to improve its financial metrics. Intel now sits just two notches above junk status, joining S&P Global and Moody’s, which had already lowered their ratings in recent months.
Fitch highlighted Intel’s struggles against rivals like NXP Semiconductors, Broadcom, and AMD, which have eroded its market share. While Intel retains dominance in PCs and enterprise servers, it faces intensifying pressure from Qualcomm and AMD in those segments. The agency warned that Intel must boost PC shipments, reduce debt, and successfully roll out new products over the next 12-14 months to regain its former rating.
Despite the downgrade, Intel’s liquidity remains “solid,” with $21.2 billion in cash and short-term investments and access to $12 billion in untapped credit facilities. However, Fitch noted that Intel’s financial structure is weaker than peers at the same rating level, raising concerns over its ability to execute a turnaround.
The move reflects broader skepticism about Intel’s comeback strategy, including its push into AI and foundry services. With rivals gaining ground and debt levels still elevated, the company faces a pivotal period to prove it can stabilize its finances and reclaim its position in the semiconductor industry.
