Intel intc issued another grim forecast Wednesday — the latest sign of slackening PC sales. The world's largest chipmaker says revenue was $8.2 billion for the last three months of 2008, a 23% plunge from the year-ago period.
The revision comes less than two months after it warned Wall Street that its fourth-quarter revenue would be $8.7 billion to $9.3 billion, down from an earlier projection of $10.1 billion to $10.9 billion.
Last year, Intel posted fourth-quarter revenue of $10.7 billion.
Intel blamed its latest projection on weaker-than-expected demand as PC makers attempt to save money by burning through their current chip inventories rather than buying more.
The decline in business was across all segments and geographies, Intel spokesman Tom Beermann says.
Intel also plans to take a $950 million non-cash charge in the fourth quarter because of the declining value of its $1.6 billion investment in Clearwire, an Internet provider specializing in a new type of wireless broadband technology called WiMax. Intel's morning announcement sent its shares tumbling 6%, to $14.44.
The latest revision underscores how deeply the economic downturn has damaged the semiconductor industry, and it suggests the high-tech industry is about to enter a slump that could last through the year — if not rival the dot-com bust of 2001, says Doug Freedman, an analyst at Broadpoint AmTech.
"The market for PCs has been deteriorating rapidly. Intel made its estimate in mid-November, and then things got progressively worse each week," says Dean McCarron, an analyst at Mercury Research.
"We're seeing this fallout hit everyone: makers of PCs and their entire ecosystem — chips, memory, power supplies, displays," McCarron says. "It is somewhat distressing."
Intel is a bellwether of the tech industry because its chips run hundreds of millions of PCs and computer servers used by businesses and consumers.
Intel's rival has also slashed its forecasts. Advanced Micro Devices amd last month warned its fourth-quarter sales would drop 25% from the previous quarter.
AMD shares slid 4%, to $2.66, in trading Wednesday.