What happened

Shares of Intel (NASDAQ: INTC) dropped on Wednesday after The Register reported that Intel processors have a security flaw that could slow down performance once patched. Intel responded to the report by claiming that the exploits affect processors and operating systems from many vendors, not just Intel. Intel stock was down 4% at 3:40 p.m. EST, while shares of rival Advanced Micro Devices (NASDAQ: AMD) were up about 5%.

So what

The Register reported that programmers have been working to overhaul the Linux kernel's virtual memory system to fix the security bug and that Microsoft planned to patch the Windows operating system. The report claimed that these updates would introduce a performance penalty for Intel products ranging from 5% to 30%.

Image source: Intel.

This report comes as AMD is pushing to win back market share in both the PC and server chip markets. AMD's Ryzen chips compete with Intel's desktop and laptop PC processors, while AMD's EPYC chips compete against Intel's Xeon server processors.

Intel responded to the report on Wednesday afternoon. It acknowledged the security issue, but claimed that it is not specific to Intel. "Based on the analysis to date, many types of computing devices -- with many different vendors' processors and operating systems — are susceptible to these exploits."

The company also provided some details on potential performance impacts: "Contrary to some reports, any performance impacts are workload-dependent, and, for the average computer user, should not be significant and will be mitigated over time."

Now what

It's unclear whether AMD processors will take a hit on performance once the exploit is patched. Intel only claimed that the flaw was not specific to its products, but didn't say that other vendors' processors would also suffer a slowdown.

If it turns out that AMD products are not negatively affected, it could make its PC and server chips more competitive. On the other hand, if the performance hit for Intel is minimal, or if it affects both companies' products, this news may do little to change the competitive landscape.

This story probably isn't going away, and we'll know more as it evolves in the coming days and weeks.

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Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Timothy Green has no position in any of the stocks mentioned. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.