Intel’s data center chip revenue dropped for the first time in seven years, leading to a disappointing first quarter and prompting the company’s new CEO Bob Swan to forecast lower earnings for the full year compared to earlier projections. This sent Intel’s stock down 7% in after-hours trading on Thursday.

Swan said he expects full-year 2019 revenue of $69 billion, compared to his January forecast of about $71 billion. This would mark Intel’s first revenue drop since 2015.

The company’s first-quarter 2019 revenue was $16.1 billion, flat year over year, while its data-centric business dropped 5%. Meanwhile its PC-centric business grew 4%.

Intel’s data-centric business includes its data center, IoT, Mobileye (vision-based driver-assistance systems), memory, and programmable chips divisions. During Q1, data center revenue declined 6% year over year to $4.9 billion. IoT revenue was up 8% to $910 million, Mobileye grew 38% to $209 million, memory dropped 12% to $915 billion, and programmable chips fell 2% to $486 million.

Swan, whom Intel promoted from interim to full CEO just days after reporting a Q4 2018 revenue miss, blamed the disappointing data center revenue on weak sales in China, deferred purchases by cloud providers and enterprise customers, and increased costs related to its 10-nanometer (nm) chips. The company has struggled to develop its processor technology for 10nm chip manufacturing while its competitors including Arm, Samsung, and Taiwan Semiconductor Manufacturing Co. have already brought their next-gen silicon to market.

Despite delays, Swan told investors on its investor call that Intel still expects to sell 10nm consumer products by the holidays and then follow soon after with 10nm data center chips.

The Q1 earnings report comes about a week after Intel announced it was exiting the 5G smartphone modem business.

“When it became apparent that we don’t have a clear path to profitability in 5G modems, we acted,” Swan said on today’s call. Intel will continue to make 5G chips for networking equipment and base stations, and plans to grow its edge infrastructure revenue, Swan added. “By acting now, we focus our 5G efforts on the transformation of the wireless network and edge infrastructure where we have a clear technical advantage, market share to win, and a strategic role to play with customers.”

The company plans to grow its 5G networking infrastructure business “to 40% market segment share by 2022,” Swan said. “The vast majority in the 5G opportunity and profit is in the network transformation and edge infrastructure.”