by Jeremy Kirk

Weak demand causes Intel to cut Q4 forecast

news
Jan 7, 20092 mins

Chipmaker revises expectations downward by 20 percent compared to last quarter

Intel expects fourth-quarter revenue for fiscal 2008 to fall 23 percent compared to a year prior due to weaker demand for computer processors, the company said Wednesday.

The chipmaker expects fourth-quarter revenue of $8.2 billion, down 20 percent compared to the previous quarter. Intel revised its fourth-quarter expectations ahead of its scheduled earnings announcement on Jan. 15.

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Intel’s grim news comes as technology companies are feeling the full brunt of the global economic crisis, as demand for software and hardware slows.

Intel also said it will take a much higher loss on other equity investments than it expected. The company will note a non-cash charge in the fourth quarter of $950 million related to its investment in Clearwire, which has a WiMax mobile broadband network.

Intel was one of five companies that invested $3.2 billion last year in Clearwire, along with Google, Comcast, Time Warner Cable, and Bright House Networks.

Clearwire’s stock hit a peak of more than $17 per share in February 2008, but has steadily fallen. It traded Wednesday around $5.09 a share.

Overall, Intel expects to lose between $1.1 billion and $1.2 billion on equity investments rather than the $50 million it previously expected to lose.

Intel said it expects to have spent about $2.6 billion on research and development rather than $2.8 billion. Restructuring and asset impairment charges will be around $250 million, the same as the company’s previous guidance.