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Intel's sales, profit estimates raised by Merrill Lynch

Intel Corp, the world's largest computer-chip maker, had its fourth-quarter sales and profit estimates raised by Merrill Lynch & Co, and the firm expects the company to boost its own forecast today.

Sales will rise to US$8.78 billion from US$7.16 billion a year earlier, Merrill Lynch analyst Joseph Osha wrote to clients.

He had expected US$8.4 billion. Profit will rise to US$0.31 a share, instead of US$0.28, from US$0.16, he wrote to clients.

"The changes come entirely as a result of higher revenue estimates for Intel's microprocessor business," Osha wrote.

Microprocessors contain the entire central processing unit of a computer on a single chip.

Intel, based in Santa Clara, California, and chipmakers including Texas Instruments Inc are cutting costs by devising new processes that put more wires on a chip and by making semiconductors on larger silicon wafers. Intel plans to update its mid-quarter outlook on Thursday.

Worldwide sales of micro-processors rose 6.6 percent in October from the previous month, the Semiconductor Industry Association trade group said yesterday.

Total semiconductor sales rose 23 percent in October from a year earlier.

In related news, Advanced Micro Devices Inc's newest microprocessor chip for server computers runs twice as many of the servers sold in the third quarter as a competing Intel semiconductor, researcher IDC said.

Computer makers shipped 10,746 servers with Opteron, the chip from Sunnyvale, California-based Advanced Micro, Intel's biggest rival in processors, Mark Melenovsky, an anlyst with IDC, said.

Intel's Itanium powered 4,957 servers, which run networks and Web sites.

Opteron has won clients such as Sun Microsystems Inc and International Business Machines Corp, giving Intel's processors for servers their biggest competition ever just as businesses start to increase spending, analysts said.

Revenue at Advanced Micro is forecast to grow more than twice as fast as Intel's this year and next, helped by Opteron sales, according to analysts.

Opteron, introduced in April, and Itanium both can process data in 64-bit chunks, rather than the standard 32-bit pieces.

Opteron also competes with Intel's 32-bit Xeon and Pentium.

Xeon and Pentium together dominate the market, accounting for 87 percent of the servers sold in the quarter, or 1.16 million shipments, according to IDC.
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