Intel, rival AMD fight for the spotlight
SAN JOSE, Calif. -- Intel, the world's largest semiconductor company, boosted its third-quarter sales forecast Monday amid stronger-than-expected demand for its microprocessors.
The announcement came on the day rival Advanced Micro Devices, a smaller chip maker that has struggled financially in recent quarters, hoped to own the headlines with the launch of its ballyhooed new server chip.
Intel added $200 million to the top of its financial outlook, saying it now expects sales of $9.4 billion to $9.8 billion in the current quarter. That compares with the previous forecast of $9 billion to $9.6 billion.
Santa Clara-based Intel also told investors profits are expected to be at the upper range of the company's previous guidance. Gross profit margin, a key measure of Intel's profitability, is expected to be within the upper half of the previous estimate of 52 percent of revenue, plus or minus a couple of percentage points.
Intel cited higher demand worldwide for its products for the upgrade. Intel's and AMD's primary products are microprocessors, which act as the core calculating engines in computers, from desktops and laptops to larger corporate servers that handle Internet traffic and other large volumes of data.
Intel shares fell 12 cents to $25.35 Monday. AMD shares rose 33 cents, or 2.6 percent, to $12.94.
The brightened financial forecast came as AMD was preparing launch events around the world Monday for its newest Opteron brand server chip, the biggest overhaul to AMD's product lineup since the first Opteron chip was introduced in 2003 and gave AMD a foothold in the lucrative server market.
With Opteron, AMD had captured about a quarter of the worldwide market by the time the company's momentum appeared to peak last year, according to market-share data from Mercury Research.
AMD hopes the new product -- which Chief Executive Hector Ruiz has acknowledged is six months behind schedule -- can help it regain some of the ground it has lost to Intel since last year and break even by the end of this year.
Intel, whose market value of $150 billion on Monday makes it 21 times as big as Sunnyvale-based AMD, has squeezed its smaller competitor with severe price cuts and a quick transition to a more advanced manufacturing process that lowers costs while boosting chip performance. Armed with a powerful new product lineup, Intel has roared back to command about 87 percent of the server market, according to Mercury Research.