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Tue, Oct 17, 2006 - Page 10 News List

Intel gaining on AMD, upbeat on Q4 performance

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Intel Corp, the world's largest semiconductor maker, said fourth-quarter sales will be higher than expected on market share gained from Advanced Micro Devices (AMD) Inc and the fading of concerns caused by the release of Microsoft Corp's new operating system.

The fourth quarter "will be better than was expected in the first half," John Antone, Intel's general manager for Asia Pacific said at a press briefing in Taipei.

Executives at Intel's developer forum in Taiwan declined to give details before its earnings announcement in the US today.

Intel is developing new processors to regain share lost to AMD in the market for chips that power personal computers by introducing new semiconductors. Santa Clara, California-based Intel last month demonstrated a chip with four processors, which it says will be available months before similar products from AMD.

"Across the board, the core micro-architecture is positioned for share gains in each of the segments" of desktop, notebook and server computers, said Thomas Kilroy, general manager of the company's Digital Enterprise Group.

Intel's share of the PC processor market fell to 72.9 percent in the second quarter from 82.2 percent a year earlier, according to Cave Creek, Arizona-based Mercury Research.

The company cut processor prices as much as 60 percent in July to win back market share lost to Sunnyvale, California-based AMD, which released higher-performance chips earlier. Intel's second-quarter sales fell 13 percent to US$8 billion on the price cuts, and its profit fell 57 percent to US$885 million.

The company shipped 5 million Core-2 Duo processors, its newest product line released on July 27, by Sept. 30, the fastest start for any new product line, Kilroy said.

Core-2 Duo is the brand name for new chips which contain two processors.

Concerns have eased that Intel sales will slow because consumers will wait for the release of Microsoft's new Vista operating system before they buy new computers, said Mooly Eden, Intel's general manager of mobile platforms.

"I don't hear this anxiety right now," Eden said.

He said the delay in the consumer release of Vista from next month to January helped sales because the earlier release date was in the middle of the Christmas shopping season.

Corporate customers, however, will be able to purchase Vista next month.

Intel said in April that it expects this year's sales to be about 3 percent lower than last year's US$38.8 billion. In July, the company said it expected fourth-quarter sales to "follow normal seasonal patterns" without elaborating.

Asia accounts for the largest share of Intel's sales at 50 percent, based on second-quarter income, followed by the Americas with 21 percent.

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