Intel has lowered its fourth quarter revenue projections following some recent customer cancellations of large orders.
The chip giant has become the latest company to feel the affects of the slowdown in global PC sales, particularly in Europe and the US, and the announcement follows a similar warning for its third quarter results.
Gateway and Apple announced separate profit warnings this week, both blaming slower demand for desktop systems.
Intel said it expects revenue for its fourth quarter, ending 30 December, to be flat, plus or minus a percentage point, against third quarter revenues of $8.7bn.
The company had previously expected to increase sales between four and eight per cent from the third quarter. It did not provide projections for earnings per share, which Wall Street analysts had estimated to be 42 cents.
Sean Maloney, senior vice-president and director of Intel's sales and marketing group, said: "Over the past two to three weeks we have seen negative signs for the fourth quarter because of large cancellations by customers worldwide due to weaker than expected PC demand, particularly in Europe and the US."
He also acknowledged that although PC sales in Japan and China remain brisk, "everywhere else is slower because of the general economic slowdown".
Maloney added that demand for desktop systems in the business and consumer markets have dropped, but that Intel remains confident about its server business as brick and mortar companies begin buying hardware to boost their ecommerce strategies.
"This is a [market] slowdown, not a collapse," he told Wall Street analysts.
Intel is expected to announce its fourth quarter figures on 16 January.
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