Intel Corp. is experiencing greater-than-expected unit demand for microprocessors--and even spot shortages for parts--in what is turning out to be a surprising quarter for the chip giant.
At a time when the IC industry is supposed to be in the summer doldrums, Intel's logic fabs are running at full capacity due to unexpected demand for processors, chipsets and motherboards, according to the company. On the down side, the company's communications business, especially flash memories, remains weak, it said.
Still, Intel on Friday (Aug. 23) raised its forecast for the third quarter. It expects revenue to be between $7.3 billion and $7.8 billion in the third quarter.
Intel reported a profit of $896 million, or 14 cents a share, on sales of $6.8 billion, in the second quarter. It reported a profit of $686 million, or 10 cents a share, on sales of $6.5 billion in the third quarter of last year.
Andrew Bryant, Intel's chief financial officer, attributed the new forecast to "unexpected" unit demand for mobile, desktop, and server processors. However, the flash-memory business remains weak, Bryant said.
Intel is seeing "stronger-than-expected revenues around the world and stronger-than-expected revenues in the channels," he said. "July and the first couple of weeks in August were strong," he said in a conference call.
The company is also experiencing spot shortages of undisclosed parts. "We've had some spot shortages," he said. "There have been spot constraints in the first part of the quarter."
Increased demand is causing its logic fabs to run "at full capacity," he said. The Intel CFO said the company has no plans to boost its capital spending. It is installing new equipment in its plants and has 300mm capacity coming on line, he said.
It's still too early to declare a recovery in the IC business, Bryant said. "We've seen growth this quarter," he said. The question is whether the momentum "will continue to build," he added.