Intel (stock code: INTC) is facing a class action lawsuit from investors due to alleged failures to properly disclose the financial condition of its manufacturing division and misleading statements about the company's prospects.

The lawsuit, brought by the law firm Levi & Korsinsky on behalf of investors, accuses Intel of inadequately disclosing losses related to its internal foundry model in its financial reports. Specifically, Intel is accused of not revealing the fact that its manufacturing division incurred a $7 billion loss, which led to a significant drop in the company's stock price.

Investors are dissatisfied with Intel's decision to outsource a portion of its production capacity to other foundries, arguing that the company's positive statements about its business, operations, and prospects lack reasonable basis.

During the announcement of its 2023 performance, Intel was accused of failing to accurately disclose losses in its manufacturing division and making misleading statements about its prospects, which affected investors' ability to properly assess the company's financial condition.

Starting from the first quarter of this year, Intel adopted an "internal foundry" model, allowing its product division and external customers to purchase services from its "Intel Foundry" division operated independently within Intel. However, prior to the first quarter of this year, Intel did not separately report the performance of this division.

Following comprehensive disclosure plans, Intel revealed that its foundry division incurred a loss of approximately $7 billion last year, leading to a decline in the company's stock price and diminishing market trust in Intel.

Intel outsources about 30% of its production capacity to TSMC and other semiconductor foundries. This decision has angered investors, who believe that the company has failed to effectively manage its core manufacturing capabilities.

According to Intel's first quarter 2024 financial report, the revenue of its foundry division was $4.4 billion, but it incurred a $2.5 billion loss. Since the beginning of this year, Intel's market value has evaporated by approximately one-third.

The lawsuit alleges that Intel's positive statements about its business, operations, and prospects were misleading or lacked reasonable basis. The decline in internal revenue has reduced product profitability in the foundry business, further weakening investor confidence in the company.

Levi & Korsinsky, representing investors, filed the lawsuit and encourages investors who held Intel stock between January 24 and April 25 and suffered losses to apply to become lead plaintiffs by July 2.

The outcome of this case against Intel will have significant implications for the company's future operational strategies and market performance.