Intel reports mixed quarter, delays cutting-edge chip

Tue Oct 15, 2013 7:58pm EDT
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By Noel Randewich

SAN FRANCISCO (Reuters) - Intel Corp's third-quarter results modestly beat expectations on Tuesday, but its current-quarter revenue outlook fell short and it warned that production of its upcoming Broadwell processors was delayed.

The world's top chipmaker is betting that its current Haswell PC processor with improved battery life will boost sales for the rest of 2013, beyond the typically strong third quarter when PC manufacturers buy chips in anticipation of holiday demand.

But preparations for the Broadwell chip, which will succeed Haswell, have fallen behind projections by about three months due to technical setbacks, Brian Krzanich told analysts on a conference call following Intel's quarterly report on Tuesday.

He said production of the Broadwell chips, based on the 14 nanometer technology that is ahead of rivals' technology, will not begin until the first quarter.

"We and our (manufacturing) partners have a strong desire to get Broadwell to the market," Krzanich said. "This is a small blip in the schedule."

Chief Financial Officer Stacy Smith said the delay would not affect gross margins in the fourth quarter or impact the competitiveness of Intel's product lineup.

"We're not happy with the one-quarter push but it does point to how difficult these problems are to solve," he told Reuters.

Much of Intel's strength has historically come from its chip manufacturing technology, which is the most advanced in the world and is ahead of rivals by around two years.   Continued...

People visit the Intel booth at the 2013 Computex exhibition at the TWTC Nangang exhibition hall in Taipei June 4, 2013. REUTERS/Pichi Chuang