Intel Firm on Spring Sales

Sales of Intel microprocessors should remain very high going into the summer months, the company said Thursday.

As part of its mid-quarter update, the Santa Clara, Calif.-based chip making giant said its communications revenue is expected to be better than what CFO Andy Bryant predicted earlier this quarter primarily because of increased demand for the company’s Flash memory
products.

Because Flash memory sales have been doing well, Intel bumped up the lower range of its second quarter sales. The company now expects revenue for the second quarter to be between $8 billion and $8.2 billion, as compared to the previous range of $7.6 billion to $8.2 billion.

“Demand for Intel Architecture products is consistent with the company’s expectations at the beginning of the quarter and significantly higher than in the same period last year,” the company said in a statement.

Bryant was not specific on all of Intel’s product lines but confirmed that the company plans to launch its Grantsdale and Alderwood chipsets for Pentium 4 processors on June 21.

“It’s a decent market out there and we are doing better,” Brandt said. “If there are any changes it will come down to a manufacturing question.”

The optimism echoes what analysts are saying. A recent survey by Monterey, Calif.-based Web-Feet Research estimates 2004 through 2006 will be excellent growth years for both Flash memory and DRAM manufacturers. Compared with the lackluster sales of 2003, Web-Feet estimates growth rates of 209 percent in 2004, 191 percent in 2005 and 150 percent in 2006.

The analyst firm also suggests that by the end of 2006, nine completely new memory products will be on the market in a varying combination of NOR and NAND cells. That will raise the number of commercially available components from 22 to 31. NAND flash memory is used in consumer devices like digital cameras, cell phones, USB flash drives and MP3 players. NAND flash
chips are able to transfer data with high speed, which allows recording and the replay of sound and video in real time. PCs use a variation called NOR flash especially in the BIOS layer.

The revised and rosy outlook for communications products is a boon for Intel’s Sean Maloney. The executive vice president and general manager of the company’s Communications Group has been working to pull the company back into the race after his division suffered a $600 million write off last December. Maloney is now working on the
development of WiMAX (802.11.6) wireless MAN networks and is anticipating
including the technology in its notebook chipsets sometime in 2006.