Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
?
EE Times-Asia > Manufacturing/Packaging
?
?
Manufacturing/Packaging??

Uncertainty forces Intel to skip Q1 forecast

Posted: 21 Jan 2009 ?? ?Print Version ?Bookmark and Share

Keywords:Intel Q1 forecast? market outlook? chip industry?

Intel Corp. has announced that it cannot "predict product demand" for Q1 09 and has therefore declined to offer its typical revenue and profit forecast but instead will work off a temporary number that calls for a 15 percent sequential sales decline on top of the 19 percent drop from Q3 08.

The world's biggest semiconductor company is considered the bellwether for the rest of the chip market and its lackluster Q4 08 performance coupled with its unwillingness to offer guidance for the ongoing quarter indicates the industry might be headed for one of its worst recessions in decades.

Intel said Q4 08 net income fell to $234 million, or 4 cents per share, hit hard by a $1.2 billion loss on equity investments related to its interest in Clearwire Corp.

In the year-ago comparable quarter Intel posted net profit of $2.3 billion, or 38 cents per share. Revenue in the three months ended Dec. 27, 2008 sank to $8.2 billion, down 23 percent as previously predicted, from $10.7 billion in the comparable 2007 quarter.

"The economy and the industry are in the process of resetting to a new baseline from which growth will resume," said Paul Otellini, Intel's president and CEO in a statement announcing the results. "While the environment is uncertain, our fundamental business strategies are more focused than ever."

Intel will need all the weapons in its arsenal to pull through the coming recession. It's not typical, even in the most distressing market environment, for Intel to decline to offer investors and analysts a clear idea of how it expects to perform in a particular reporting period.

What's the deal?
By refusing to provide even a wide sales forecast range this time, Intel is basically indicating demand has stalled and visibility into OEM component requirements has fogged up completely.

"Due to economic uncertainty and limited visibility, Intel is not providing a revenue outlook at this time," the company said. "For internal purposes, the company is currently planning for revenue in the vicinity of $7 billion."

What's clear is that Intel's capacity utilization has fallen very sharply and won't recover immediately. The company said Q1 gross profit margin "is expected to decline to the low 40s primarily due to higher underutilization charges and 32nm start-up costs."

Intel's Q4 08 gross profit margin fell as expected to 53.1 percent, from 58.1 percent in the 2007 comparable quarter. The company whittled down R&D as well as other operating costs during the recently ended quarter continuing a trend analysts expect will accelerate in the current difficult environment.

For 2009, Intel said it expects R&D and marketing, general and administrative charges will be between $10.4 billion and $10.6 billion. Capital spending is "expected to be flat to slightly down from 2008," Intel said.

- Bolaji Ojo
EE Times





Article Comments - Uncertainty forces Intel to skip Q1 ...
Comments:??
*? You can enter [0] more charecters.
*Verify code:
?
?
Webinars

Seminars

Visit Asia Webinars to learn about the latest in technology and get practical design tips.

?
?
Back to Top