RealTime IT News

Servers, Wireless Keep Intel in the Chips

Intel found its growth groove in its Pentium and Xeon businesses as part of its Q3 earnings report, the company said today.

The Santa Clara, Calif.-based chip making giant said its third-quarter revenue of $8.5 billion and net income of $1.9 billion were made possible by record server and mobile microprocessor shipments and gains in its Flash memory business. The company also reported earnings per share of 30 cents, which is a penny less than what financial analysts were predicting, but good overall considering the company downgraded its own numbers last month.

"Growth was not as high as we originally anticipated due to inventory adjustments at some of our major customers and lower-than-expected overall demand for PCs," Intel CEO Craig Barrett said in a statement.

Recent numbers from the Semiconductor Industry Association (SIA) show chipmakers like Intel acted quickly to reduce inventory levels between July and September. Capital spending is currently around 23 percent of sales, which is now in line with historical patterns, according to the SIA.

While Intel said that sales of its microprocessor units were higher and set a third-quarter record, the average selling price was approximately flat. The company also said that its chipset units, motherboards and wireless connectivity units set a record.

In the course of the last three months, Intel introduced four new low-voltage and ultra-low-voltage Pentium M processors and Celeron M processors.

The company said its progress in the enterprise segment was highlighted by its new dual-processor Xeon platform, but did break out separate sales figures from its single core workhorse. The newer chips support faster DDR2 memory, high-bandwidth PCI Express interconnect technology, Demand Based Switching for power reduction, and Intel EM64T technology for working with very large data sets.

And even though it has been less than excited about its current Itanium sales record, Intel is looking ahead to its next-generation Itanium processor, code-named Montecito, which will have 1.7 billion transistors, each allowing for multiple CPU cores and 24 megabytes of cache memory.

In wireless, Intel said it shipped a record number of Wi-Fi connections and delivered the first samples of a product code-named Rosedale, a system-on-a-chip solution for WiMAX wireless broadband equipment for homes and businesses. In addition, Intel, NEC, Texas Instruments and Wisair demonstrated forthcoming Wireless USB and ultra-wideband technologies.

Intel also noted that it has completely crossed over to 90-nanometer technology in microprocessor shipments from its previous 1.3 micron production. The company also reiterated its plans to have its 65-nm manufacturing technology process ready in 2005 with the majority of its shipments coming in 2006.

In another notable spot on the sales front, Intel reached a sales milestone this quarter by shipping more than 50 million desktop, server and mobile processors with its Hyper-Threading (HT) technology. Introduced last year, the technology boasts a boost in performance as much as 25 percent when combined with its enabled chipset, BIOS, operating system and application software.

HT is part of a family of Intel technologies it refers to as its "T family." The technologies, which include Intel's 64-bit extensions (EM64T), will also be joined in 2006 with Intel's LaGrande Technology (Security, LT) and Vanderpool and Silvervale Technology (Virtualization, VT/ST) to coordinate with Microsoft's next-generation Windows OS named Longhorn.