As research firm Lehman Brothers Inc. expected, Intel Corp. did not change its guidance at its spring analyst meeting this week given that it has an update slated for June 5. But, contrary to some of the firm's predictions, Intel did not admit any challenges on the Asia front.

"Based on our conversation with management, Intel did not see any weakness out of Asia that they weren't expecting but they did acknowledged that it is hard to tell if customers are over-ordering and building inventory or if there is excess PC inventory building," Lehman analyst Dan Niles noted in a report today. "Also Intel normally needs to do almost 40 percent of revs for Q2 in the month of June."

Niles had noted PC demand's affects on the No. 1 MPU maker are great and can heavily influence its results. On Thursday, top PC vendor Dell Computer Corp. forecasted Q2 industry units to decline 6 percent quarter-over-quarter, compared to an average sequential decline of 3 percent and Intel's revenue midpoint of down only 1 percent quarter-over-quarter.

"We continue to believe this may be aggressive, but maybe better ASPs can bridge the gap," Niles said. "In summary, we believe end-demand is tracking weaker than seasonal norms so far vs. Intel's belief that demand is tracking at the higher-end of seasonal norms."

At the conference, Intel coined the term "digital dynamics," referring to its stance on enterprise computing through new applications, e-business, security, WLAN and mobility. On that, Intel forecasted that the IT industry will grow 4 percent to 6 percent year-over-year in 2003 due to convergence of enterprise applications, mobility and the digital home processing, according to Lehman.

"Intel believes that they are the leader in driving innovation through R&D investments, manufacturing capacity, brand momentum and Intel Capital investments," Niles said. "We believe Intel will be one of the leading companies to drive digital standardization across the home, enterprise and consumer applications."

Intel, still energized on its March Centrino mobile technology launch, has made it no secret that it believes that the convergence of computing and communication is being driven by wireless as the killer environment. On that, Intel said it expects to see about 1.5 billion PCs with broadband and more than 2.5 billion PCs connected with high performance handsets in 2010, according to Lehman.

"We note that Intel believes that not just WLAN is the killer environment, but the wireless devices will need multiple standards in all geographies on a single device," Niles said. "This includes 802.11a/b/g/i/n and GSM/GPRS/UMTS/4G. Intel believes wireless capabilities will also impact server opportunities for databases and OCC (occasionally connected computing) applications (i.e. text messaging).

"Intel believes they can drive convergence by being the lowest cost provider of standard components with the highest capabilities and best diffusion engine," he continued. "Intel also plans to begin production on 0.09--micron production and expects 0.65-micron production in 2005, which will help drive those costs lower."

On the processor front, Intel discussed its Dothan wafer, Centrino taken to 90nm and its first processor on 90nm technology going to 300mm.

"Going forward in 2H:03, Intel also plans to release its Dothan 0.09-micron mobile processor, which operates with 2x cache and higher GHz performance on 802.11a/b and -b/g combos," Niles said.

Intel also has said that in it will offer an 802.11a/b/g combo for connectivity in 2004, and commented at the event that its Prescott processor offers hyper-threading and the additional La Grande technology offers embedded security both on 90nm and 300mm technologies, Lehman said.

"Intel is also focusing on the digital home with its release of Springdale's chipset in 1H and release of the Prescott in 2H," Niles said. "The company also plans to focus on the integrated graphics and plans to become the number one player in 2003."

Intel also commented that it plans to regain NOR flash business by doing what it takes to maintain and win new business on its Q1 29 percent fall. That fall lead to flash gains at Samsung Electronics Co. and Intel's chief rival Advanced Micro devices Inc., which has forecasted further Q2 gains.

By: DocMemory
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