Intel lowers 3Q outlook: What’s the real driving factor?

September 7, 2012 - Intel is lowering its 3Q12 outlook citing sluggish demand amid challenging macroeconomic conditions. The chipmaker says 3Q12 sales will come in about a billion dollars short of expectations, in a range of $12.9-$13.5 billion instead of $13.8-$14.8B, and gross margins will be about a point lower than projected (62% instead of 63%). The firm also said its capital spending for all of 2012 will be on the low end of its $12.1-$12.9B guidance, as it "accelerates the re-use of existing equipment to the 14nm node." Notably, the company also pulled back its full-year forecasts, which it will update in its 3Q earnings report due Oct. 16.

"[We are] seeing customers reducing inventory in the supply chain versus the normal growth in third-quarter inventory, softness in the enterprise PC market segment, and slowing emerging market demand," Intel said in a statement.

Analysts have for weeks been pointing out warning signs about how a variety of macroeconomic concerns are impacting the semiconductor sector. Both Intel and AMD have been predicting a slowdown in 3Q12. "We anticipate the worst 2H for PC sales since inception," warns Citigroup’s Glen Yeung, citing not just the macroeconomic factors but also increasing tablet competition and undetermined Windows 8 timing. "Multiple challenges in the PC space, with slower ultrabooks, weaker OEM commentary and Win8 pricing [are] affecting a more cautious OEM-ODM outlook," adds Vijay Rakesh from Sterne Agee.

Intel’s downgrade though, provides new clarity on just how dismal the environment is becoming. "It

POST A COMMENT

Easily post a comment below using your Linkedin, Twitter, Google or Facebook account. Comments won't automatically be posted to your social media accounts unless you select to share.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

NEW PRODUCTS

Entegris announces GateKeeper GPS platform
07/15/2014Entegris, Inc., announced last week the launch of GateKeeper GPS, its next-generation of automated regeneration gas purification system (GPS) technology....
Bruker introduces Inspire nanoscale chemical mapping system
07/15/2014Bruker today announced the release of Inspire, the first integrated scanning probe microscopy (SPM) infrared system for 10-nanometer spatial...
MEMS wafer inspection system from Sonoscan
06/25/2014Sonoscan has announced its AW322 200 fully automated system for ultrasonic inspection of MEMS wafers....