Tech gloom continues for Intel

By Alun Williams

Posted on 16 Oct 2002 at 10:55

The chip giant has reported sales in the region of $6.5bn, but this represents an increase of just three per cent over the last quarter and is flat year-on year.

Intel is still in the black, of course - to the tune of $686m - but analysts have noted that production costs are having an effect on Intel's gross profit margin. This stands at 49 per cent, which is historically low for Intel, and further job cuts have been threatened.

Intel's boss, the CEO Craig R. Barrett, emphasised Intel's investment in R&D. 'Although the industry is experiencing one of its worst downturns ever, we continue to move our technology forward, introducing 18 new processors during the quarter, all on our leading-edge 0.13-micron technology'.

'Going forward, we remain committed to investments in new products and technologies, setting the stage for us to emerge even stronger when the economy and demand recover,' added Barrett. With revenue in the fourth quarter similarly expected to be between $6.5bn and $6.9bn Intel sees no immediate upturn for the coming months.

Back in July, we reported on Intels Second Quarter results. Amid falling sales, Intel was downbeat about any immediate economic upturn lead by IT spending. 'The recovery is being pushed out,' said Intel's chief financial officer, Andy Bryant, who anticipated corporate IT investment to remain cautious.