Economic Fog Lifts a Bit on Computer Chip Biz

By Jeff Malester On Jan 21 2002 - 8:00am




There could be some light at the end of the tunnel, with revenue and profit at chipmaker Intel beating analysts' forecasts in the fourth quarter. At the same time, smaller rival Advanced Micro Devices (AMD) posted a smaller fourth quarter loss and greater revenue than Wall Street had expected.

Following what has been called the worst recession year the PC industry has ever endured, Intel reported fourth-quarter revenue of $7 billion, a 7 percent increase over the same three months in 2000. Net income, including acquisition costs, however, slid 77 percent to $504 million, compared with $2.2 billion in the year-ago fourth quarter.

"2001 was a terrible year for our industry," said Craig R. Barrett, president/CEO. "While 2001 was difficult for Intel, I can't imagine changing places with any other company on the planet."

Intel's first-quarter sales predictions for 2002 remain bearish, with the company expecting revenue of between $6.4 billion and $7 billion during the three months.

Led by record unit and dollar sales of PC chips, AMD reported that PC processor revenue surged more than 50 percent sequentially and that the company sold a record 7.8 million PC processor units in the fourth quarter ended Dec. 30.

However, fourth-quarter revenue dipped 19 percent to $952 million, down from $1.2 billion in the same quarter in 2000. AMD lost $15.8 million in the fourth quarter, compared with a profit of $178 million in the year-ago three months.

AMD expects PC processor unit shipments in the first quarter of 2002 to remain at or near the record level of 7.8 million units, with average selling prices at or near the $90 level of the fourth quarter of 2001.

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