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Sat, Sep 10, 2005 - Page 12 News List

Intel continues to see healthy growth in global PC market

AP , SAN JOSE, CALIFORNIA

Citing continued demand for the chips that power notebook computers, Intel Corp tightened the range of its third-quarter revenue forecast on Thursday but kept the midpoint unchanged at US$9.9 billion.

The world's largest maker PC microprocessors said it now expects revenue to be between US$9.8 billion and US$10 billion, compared with its previous estimate of US$9.6 billion to US$10.2 billion.

"Operating results for the quarter are consistent with our outlook in July," said Andy Bryant, Intel's chief financial officer. "We continue to see healthy growth worldwide in the PC market and in Intel's revenue and gross profit."

Wall Street analysts expect Intel to earn US$0.36 per share on sales of US$9.92 billion, according to a survey by Thomson Financial.

As with previous quarters, the company reported strong demand for its Centrino chips designed for wireless-enabled laptop computers. The chips, like the computers, carry a price premium over those built for desktops.

Intel said that it continues to see double-digit year-over-year growth driven by notebook demand.

But some analysts are concerned that while demand is strong, Intel may be struggling to meet demand, particularly with chipsets that control communication between the processor and the rest of the computer.

Apjit Walia, a semiconductor analyst at RBC Capital Markets, said it appears the company has made some progress in easing the supply issue.

"However, we don't expect Intel to post a big upside to consensus estimates this quarter as we don't believe the supply issues have been fully resolved yet," he said in a research note.

Bryant said chipsets will remain tight.

"Any capacity additions we are putting in place won't yield much to us until the first part of 2006," he said.

The update was released after markets ended trading. Intel shares closed at US$26.09, up US$0.43, or 1.7 percent, on the NASDAQ Stock Market. In after-hours trading, they lost US$0.20.

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