Responding to worsening economic conditions worldwide, Intel stated in an SEC filing that business conditions might worsen and that chip demand might suffer. "The current uncertainty in global economic conditions makes it particularly difficult to predict product demand," the filing reads, repeating data from Intel’s third-quarter earnings announcement.
For 2008’s fourth quarter, Intel expects revenue of between $10.1 billion and $10.9 billion and a gross margin of 59 percent. (Gross margin is a key profitability indicator.) The company said that economic uncertainty might "negatively impact our gross margin if we fail to reduce manufacturing output accordingly."
According to Intel, "There could be a number of follow-on effects from the credit crisis on Intel's business, including insolvency of key suppliers resulting in product delays; inability of customers to obtain credit to finance purchases of our products and/or customer insolvencies." Intel also cited "increased expense or inability to obtain short-term financing of Intel's operations from the issuance of commercial paper."
Restructuring and asset-impairment charges will be approximately $250 million, which includes charges related to Intel's joint decision with Micron to discontinue the supply of NAND flash memory from a facility within the Intel-Micron manufacturing network.
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