Intel today narrowed its revenue forecast for the fourth quarter to be between US$10.4 billion and US$10.6 billion, as compared to the previous range of US$10.2 billion to US$10.8 billion.
The company also narrowed its gross margin percentage expectation for the fourth quarter to 63%, plus or minus a point, with the final results expected to be slightly above the midpoint of the new range. The previous expectation was 63%, plus or minus a couple of points. Capital spending is expected to be below the midpoint of the previous expectation of US$5.9 billion, plus or minus US$200 million, while all other expectations are unchanged.
The narrowing of the fourth-quarter revenue forecast toward the mid-range of Intel’s original guidance was expected by most analysts, with Bank of America explaining that Intel had a relatively lackluster month in October. According to a recent report from the equity firm, Intel has faced capacity constraints on its chipset production, which in turn has affected the company’s CPU sales.
With the PC market performing better than Intel expected this year, the chip giant has been forced to source chipsets from ATI Technologies in order to maintain its supply of entry-level PCI Express (PCIe) motherboards. However, the company was not able to ramp production until after October.
Although the chipset supply is less of a problem now, Bank of America does not expect the issue to be completely resolved until the middle of next year, as Intel transitions chipset production to a 90nm, 300mm capable design.
Mercury Research estimates that shipments of PC chipsets based on the Intel platform will fall to 39 million units in the fourth quarter of this year, down from 41 million in the third quarter, while shipments of non-Intel chipsets will grow 37% sequentially to 34.7 million units this quarter.
Article edited by Rodney Chan
