Athlon, Opteron

By John G. Spooner  |  Posted 2006-07-20 Print this article Print

The chip maker has also introduced new Athlon 64 X2 models and will roll out a new Opteron in early August. Meanwhile, despite saying they were comfortable with a rise in their in-house processor inventory, which consists of several hundred million dollars worth of extra chip sets and Core 2 and Pentium D processors, Intel could be harmed by the extra supplies should an unexpected economic downturn arise, Intel CFO Andy Bryant said.
Intel is expecting a second half thats in-line with seasonal trends. Thus it expects third-quarter revenue to rise about 7.5 percent, a figure thats within norms for the quarter.
It did not offer a fourth-quarter forecast, however. Calling the third quarter can be tricky as PC makers dont always order processors until the last minute, trying to get a better read on fourth-quarter sales. Meanwhile, more layoffs may still be in the offing at the chip maker. Intel is now about half way through an exhaustive internal review, designed to increase its efficiency, Otellini said. The efficiency review began in April and has so far resulted in a small number of layoffs. Intel cut about 1,000 management positions on the morning of July 13. It also arrived at an agreement sell its XScale application processor line to Marvell Technology Group. Intel will shed 1,400 employees in the deal, most of whom are expected to move to Marvell. Intel believes that attrition combined with the July 13 cuts and the XScale sale will reduce its headcount, which was about 103,000 in the first quarter, to below 100,000. But more cuts could come. "On what weve done today, Ill get below 100,000," Bryant said. However, "We may have actions that will take it even lower before the end of the year." Intel, which has been under pressure from AMD, intends for the cuts to remove extra management layers and thus improve its internal communications and decision-making capabilities, making it more competitive, Otellini said in a memo to company staff, obtained by eWEEK. Click here to read the full text of Otellinis memo. Thanks to the review, "We have a tight handle on spending and are making good progress on identifying ways to improve our efficiency…for the long term," Otellini said. In addition, Intel is aiming to ratchet up the overall speed with which it moves. Aside from rolling out produce like the Core 2 ahead of schedule, it plans to shift much more quickly to new processor architectures, redesigning the circuitry that underpins its PC and server chips every two years, for example. By adopting new architectures—themselves simplified to allow more elements to be reused—on this schedule, Intel said it believes it can rapidly drive up its chip performance, while continuing to keep power consumption under control. Editors Note: This story was updated to include additional information and comments from Intels July 19 earnings conference call with analysts. Check out eWEEK.coms for the latest news in desktop and notebook computing.

John G. Spooner John G. Spooner, a senior writer for eWeek, chronicles the PC industry, in addition to covering semiconductors and, on occasion, automotive technology. Prior to joining eWeek in 2005, Mr. Spooner spent more than four years as a staff writer for CNET, where he covered computer hardware. He has also worked as a staff writer for ZDNET News.

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