Intel cut its current quarter revenue forecast Monday due to a design error in a recently released chipset.
The error affects its Intel 6 series chipset, the company said, and it is prompting it to hold all shipments. The design error will reduce revenue by about $300 million.
Intel will begin delivering an updated version of the chip to customers in late February.
The company will also take a current quarter charge, though it did not specify by how much.
Revenue growth for the full year on a percentage basis is now expected to be in the mid-to-high teens, compared with the company's prior forecast of about 10 percent.
Recent acquisitions are expected to push overall revenue higher. Intel says it now expects total revenue of $11.7 billion, plus or minus $400 million.
Its prior outlook was for $11.5 billion, plus or minus $400 million.
Analysts said the financial impact of the design error would be muted, but added that the issue would ding the company's reputation, at least temporarily.
"This is a minor negative and not as big an issue as it seems," said Miller Tabak analyst Brendan Furlong. "It's obviously an embarrassment, rather than a major problem for the company."
Shares of Intel , which were briefly halted in morning trade, resumed trading about 2 percent lower.
Share of rival chipmaker AMD were trading roughly 4 percent higher; shares of Nvidia were up slightly.
--Reuters and AP contributed to this report.