Intel Corp, the biggest maker of computer chips, will sharpen its focus and roll out smaller, faster models of its Pentium 4 processor as an industrywide slump continues, Chief Executive Craig Barrett said.
"There are a number of turbulent factors going on in the industry today, everything from the general economy to the dotcom meltdown," Barrett said at a meeting broadcast over the Internet.
Intel two weeks ago said fourth-quarter sales will be US$6.2 billion to US$6.8 billion, the same target the company has set for three straight periods. Barrett didn't change that forecast today.
The chipmaker's revenue has slipped this year as slack economic growth pushed customers to trim orders, and consumer confidence dropped further after terrorist attacks on Sept. 11.
The current slump will prove twice as deep as the decline of 1985, Barrett said. Most analysts expect worldwide chip sales to fall 25 percent to 30 percent this year.
Intel this year stopped selling consumer products such as digital cameras and some Internet services and networking gear, which Barrett today said were "distracting." Barrett tried to reassure investors, comparing the current slump to lulls after the industrial revolution and the invention of the automobile. After periods of "irrational exuberance" came periods of "reality" and then growth again, he said.
Barrett said he's optimistic that the PC-chip unit can grow more than 10 percent a year going forward. Overall, he still sees the company's sales rising 15 percent to 20 percent a year.
Intel highlighted recent suc-cesses from its latest Pentium 4 processor for personal computers. The chipmaker earlier this month started shipping more Pentium 4s than older Pentium IIIs.
About 42 percent to 49 percent of the PCs sold in Best Buy Co's stores in October used the Pentium 4, and more than 80 percent of those sold by Gateway Inc this month use the chip, Intel Executive Vice President Paul Otellini said.
Intel expects that late this quarter it will start shipping models of the Pentium 4 based on a new manufacturing method that prints thinner, 0.13 micron circuits. PCs using these chips and faster, so-called double data-rate memory will be available "very early" next year, Otellini said.
Santa Clara, California-based Intel is further shrinking the circuits in its chips. The company is now moving to the tiny, 0.13 micron wires and will shift to 0.09 micron in 2003.
"Ultimately, you have to measure us by our results, getting new products out, getting new technology out," Barrett said.
The chipmaker wants to start selling 3 gigahertz Pentium 4s next year and plans a new Celeron chip for inexpensive PCs based on the Pentium 4 design for the middle of 2002, Otellini said.
Intel will add a Pentium 4 for laptops in the first quarter, he said. The chipmaker will also bolster its lineup for servers that dish up Web pages, with fancier Xeon and Itanium processors next year, he said.
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