Chipmaker Intel Corp CEO Paul Otellini vowed to shore up the company's defenses against steep drops in memory chip prices that forced it to lower its profit forecast for the current quarter.
Price erosion for NAND flash memory has been much steeper in the first quarter than Intel had expected, Otellini said on Wednesday.
Otellini, speaking at an investor conference at the company's Santa Clara headquarters, said the company plans to move aggressively this year into new markets to better insulate itself against plunging prices for a type of memory called NAND flash. One new market for NAND flash memory is solid-state computer drives, which store data on memory chips instead of spinning disks.
PHOTO: AFP
Despite the memory-market woes, Otellini says Intel's core computing business is firing on all cylinders. Otellini said Intel is making rapid progress in shipping chips based on a new chip-making process.
Intel is also re-evaluating how quickly it wants to increase its investment in NAND flash, Otellini said. Intel started making NAND flash in 2006 under a joint venture with Micron Technology Inc.
"This business will not be a drag on Intel Corporation," Otellini said. "We're going to fix it, or we're going to make sure it's profitable, one way or another."
Intel's primary business is making microprocessing chips, the brains of personal computers. But its memory chips are widely used in portable electronics like digital cameras and MP3 players.
Prices for computer memory have been under intense pressure because of oversupply and fierce competition. Intel had forecast a 27 percent price drop for NAND flash in the first quarter, but prices have fallen 53 percent, leading Intel to revise its profit forecast this week.
"Pricing has moved very rapidly, much more so than we thought," Otellini said.
Intel now expects a gross profit margin of 54 percent of revenues, plus or minus a percentage point, in the first quarter, which ends in March. That is down from its previous forecast of 56 percent, plus or minus a couple percentage points.
Gross margin is an important measure of profitability. It shows how much money a company made on each dollar of revenue, once manufacturing costs are stripped out.
Intel has sold 4 million processors built with equipment that shrinks the average width of their circuitry to 45 nanometers, or 45 billionths of a meter. The smaller a chip's circuitry, the more transistors can be squeezed onto it and the better it can perform.
Intel began selling these new, more efficient chips in November, jumping to a big lead over its smaller rival in the microprocessor market, Sunnyvale-based Advanced Micro Devices Inc.
But AMD announced this week that it is on track with its own 45-nanometer technology and plans to ship similar chips to manufacturers this year.
AMD this week also announced a new chipset that promises to improve the ability of personal computers to play high-definition videos and play graphics-intensive games without expensive add-on cards.
The chipset is part of AMD's push to challenge Intel on the graphics capabilities of its chips, an area where AMD has made a US$5.6 billion bet in the form of its acquisition of graphics chip maker ATI Technologies Inc.
The CIA has a message for Chinese government officials worried about their place in Chinese President Xi Jinping’s (習近平) government: Come work with us. The agency released two Mandarin-language videos on social media on Thursday inviting disgruntled officials to contact the CIA. The recruitment videos posted on YouTube and X racked up more than 5 million views combined in their first day. The outreach comes as CIA Director John Ratcliffe has vowed to boost the agency’s use of intelligence from human sources and its focus on China, which has recently targeted US officials with its own espionage operations. The videos are “aimed at
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
SHIFT: Taiwan’s better-than-expected first-quarter GDP and signs of weakness in the US have driven global capital back to emerging markets, the central bank head said The central bank yesterday blamed market speculation for the steep rise in the local currency, and urged exporters and financial institutions to stay calm and stop panic sell-offs to avoid hurting their own profitability. The nation’s top monetary policymaker said that it would step in, if necessary, to maintain order and stability in the foreign exchange market. The remarks came as the NT dollar yesterday closed up NT$0.919 to NT$30.145 against the US dollar in Taipei trading, after rising as high as NT$29.59 in intraday trading. The local currency has surged 5.85 percent against the greenback over the past two sessions, central
RSS