Shares of Intel (INTC) and Advanced Micro Devices (AMD) are in focus following a report from The Register that alleged Intel processor chips have a fundamental security flaw that forced redesigns of Linux and Windows kernels.

DESIGN FLAW: A newly discovered silicon-level flaw in Intel’s chip designs is forcing operating system manufacturers to update kernels and other software components to rectify the issue, The Register reported on Tuesday.

The changes will reportedly lead to a performance slowdown of Intel products and while the publication says “effects are still being benchmarked,” it estimates a slowdown of 5% to 30%. Newer Intel chips that have features such as process-context identifiers are expected to take less of a hit. The security flaw allegedly grants user applications a certain level of access to protected kernel memory data, which can include everything from passwords to application keys and file caches. Intel is unable to close the hole with a firmware update, leaving operating system manufacturers like Microsoft (MSFT) and Apple (AAPL) to push out their own fixes. Linux programmers are working to overhaul the open-source kernel’s virtual memory system, while Microsoft is developing a fix and is expected to release the Windows change through a Patch next Tuesday. Apple will also need to update its 64-bit macOS.

AMD RESPONSE: According to The Register, Advanced Micro Devices software engineer Tom Lendacky sent an email to the Linux kernel mailing list on December 26, which read, “AMD processors are not subject to the types of attacks that the kernel page table isolation feature protects against. The AMD microarchitecture does not allow memory references, including speculative references, that access higher privileged data when running in a lesser privileged mode when that access would result in a page fault.”

PRICE ACTION: Intel is down 2% to $45.92, while Advanced Micro Devices gained 5.5% to $11.58 in early trading. 

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