Intel profits dive 90 per cent

In its fourth quarter earnings report Intel has reported sharply reduced profits and has refused to issue a revenue forecast for the coming quarter.

Chief executive Paul Otellini said that it earned a $234 million profit for the last three months of 2008, 90 per cent less than the same period a year ago. Overall for the year profits were down 24 per cent at $5.3bn.

“The pace of the decline was dramatic, with reduced demand and inventory reduction in the fourth quarter,” he said.

“We are assuming the decline will continue into the 1st quarter of next year. It’s been a poor ending to an otherwise great year.”

The company declined to issue a revenue forecast for the first quarter of 2009 but said that the company was working on a ballpark estimate of around $7bn.

Otellini said that far from cutting back on research and development spending Intel would carry on investing in new developments and would bring its 32nm production facilities online in the second half of this year.

“The best way to beat a recession is with new products rather than sticking with the old,” he said.

“We are on track for 32nm production in the second half of 2009 and won’t slow introduction at all. We believe it will increase our product lead, lower costs and lead to whole ranges of new designs, especially on-chip products.”