Intel lowers revenue outlook for Q3 to US$13.2bn – enterprise PC market stalls

7 Sep 2012

Chip giant Intel said today that third-quarter revenues are expected to be lower than expected due to weaker than expected demand and a challenging macroeconomic environment. It expects revenues to come in at US$13.2bn, plus or minus US$300m.

This is less than its originally forecast US$13.8m to US$14.8bn. In its most recent second quarter, Intel reported revenues of US$13.5bn due to demand for its chips in smartphones, cloud data centres and ultrabooks.

However, the company said it is now seeing customers reducing inventory in the supply chain versus the normal growth seen in the third quarter. This disclosure should send out warning signals to the rest of the computer industry as Q3 is traditionally a strong season in terms of back-to-school activity and the run-up to the busy Q4 Christmas sales season.

It also said it is seeing the enterprise PC market softening, as well as slow demand in emerging markets.

Intel said its data centre business is continuing to meet expectations.

The company expects a Q3 gross margin of 62pc, down from 63pc.

Capital spending for the full year is likely to fall to closer to US$12.1bn rather than up to US$12.9bn as expected.

Intel said it is accelerating the re-use of existing equipment as it moves to the 14-nanometre chip process.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years

editorial@siliconrepublic.com