Shares of Intel Corp. fell 7% on Friday as Wall Street analysts worried how quickly the chipmaker could close the gap with rivals as it spends billions of dollars to increase manufacturing.

In recent years, Intel has struggled to develop new manufacturing technology, causing it to fall behind rivals Advanced Micro Devices Inc and Nvidia Corp in the race to make smaller chips with processing speed. faster.

Patrick Gelsinger, who returned to the company as CEO this year, has announced plans to spend up to $ 20 billion to build two factories and open factories to other chipmakers and advance capacity. chip manufacturing.

“There are important issues that need to be overcome for this to be successful, with investments up front and profits unlikely until 2025 if not later,” Atlantic Equities analyst Ianjit Bhatti said.

“In the short term (2-3 years), we don’t think Intel has an answer to AMD’s market share gains.”

Intel on Thursday announced its second quarter profit forecast which was below average analyst expectations. The company’s chief financial officer, George Davis, told Reuters the drop in profits was due to the company investing in ramping up its new 10-nanometer and 7-nanometer manufacturing technologies.

Gelsinger also announced plans to manufacture chips for auto factories at its factories to help alleviate a global chip shortage that has plagued the auto industry.

Analysts were largely on the sidelines; 26 of the 40 covering the stock have a “hold” rating or lower. Fourteen analysts have a “buy” or higher rating on the stock. The current median price target on the stock is $ 65, according to Refinitiv data.

“The shortage … is going to demand spending on a gigantic scale for chipmakers. Expenses Intel cannot afford as it tries to reclaim its title as the most valuable chipmaker in the United States. “said Samuel Indyk, senior analyst in the UK. .Investing.com.