Intel broke nearly every sales and unit shipment record in the book in the just ended quarter . And although Intel projects strong growth in the fourth quarter, there are some concerns going forward for the microprocessor giant.

Corporate IT spending remains a non-event, leaving some to believe that Intel and other chip makers are seeing seasonal growth verses a sustained upturn.

Also, Intel's consumer-oriented processor business appears to be going through the roof, but its flash-memory business remains soft.

And then there's a nagging issue that won't go away. During the call, Intel dismissed rumors that it is having problems with its 90-nm process, although the company did say it has altered the "thermal target" for its next-generation desktop processor, code-named Prescott.

As reported, there are rumors flying that Intel is struggling with the 90-nm process, which is due out later this year. Intel's next-generation desktop processor was reportedly running at a whopping 103 Watts, according to a recent report from American Technology Research Inc. The processor, dubbed Prescott, is a 90-nm version of the Pentium 4 architecture.

Paul Otellini, president of Intel, dismissed the rumors about the 90-nm process. "There are a lot of rumors running around," he said. "The process is healthy," he insisted during a conference call with analysts.

He acknowledged that the company has tweaked the "thermal target" for Prescott. "We ended up changing the thermal target for Prescott," he said. Intel "changed the thermal envelope---slightly."

He was also quick to point out that Prescott and Dothan are both "sound" and that revenue shipments would occur by year's end, as previously planned. Dothan is Intel's next-generation mobile processor, based on 90-nm technology.

Intel's efforts to ramp 90-nm technology on 300-mm wafers "are progressing," added Andy Bryant, chief financial officer for Intel. In fact, the company not only plans to ramp up Prescott and Dothan on 90-nm technology by year's end, but it also will move "most of the value line" of processors onto this process in Q1 of 2004, he said.

Besides the 90-nm issues, it was difficult to find any faults at Intel. "It turned out to be among the biggest quarter we've ever seen," Bryant said.

Intel's third quarter sequential sales growth was the best in over 20 years and year-over-year unit growth was the best since 1996, he said. The company had record shipments of desktop and mobile processors, as well as chip sets, Otellini said.

Intel is benefiting from huge growth for processors, especially in emerging markets in Asia and Europe, he said.

On the down side, Intel is seeing only "modest growth in the corporate market," he said. Flash-memory unit growth was slightly up, but average selling prices were down, he said.

By: DocMemory
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