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Intel confirms chipset shortages in forecast

Posted: 12 Sep 2005     Print Version  Bookmark and Share

Keywords:notebook pc  microprocessor  flash 

Amid a severe shortage of chipsets for notebook PCs, Intel Corp. said it expects revenue for the third quarter to be between $9.8-to-$10 billion, as compared to the previous range of $9.6-to-$10.2 billion.

The chip giant continues to see double-digit year-over-year growth, driven primarily by strong demand for notebook PCs.

Andy Bryant, chief financial officer for Intel, confirmed industry reports that the microprocessor giant is experiencing a shortage of chipsets for notebook PCs.

"We are sold out," Bryant said.

Chipset shortages are expected to last until the "first part of 2006," he said during a conference call with analysts.

Intel is manufacturing its chipsets within its 8-inch fabs. The company plans to make "a few more wafers in the quarter," but it will not be able to meet huge OEM demand for these products, he added.

Beyond chipsets, "there are no surprises" in terms of demand for processors and other products in the quarter, he said.

Meanwhile, Intel's third-quarter gross margin percentage is now expected to be 60 percent, plus or minus a point, and is expected to be slightly above the midpoint of the range. The previous expectation was 60 percent, plus or minus a couple of points.

Intel's tax rate forecast for the third quarter was approximately 30.5 percent. The third-quarter tax rate is now expected to be impacted by additional taxes of approximately $250 million, plus or minus $25 million, related to a potential repatriation of approximately $6.3 billion of accumulated income earned abroad. The company's tax rate forecast for the fourth quarter is unchanged at approximately 30.5 percent.

The new forecast appears to be in line with analysts' expectations. Intel was expected to narrow its sales guidance to $9.9-to-$10.1 billion in Q3, according to Pacific Crest Securities Inc. Intel is projected to earn $0.37 a share in Q3, according to Pacific Crest.

The investment banking firm also claims that Intel is experiencing shortages of chipsets for notebooks and has delayed its 90nm flash-memory production (see Sept. 7 story). In Q2, the company earned $0.33 a share on sales of $9.23 billion. In Q3 of 2004, it earned $0.30 on sales of $8.47 billion.

- EE Times





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