Intel has predicted a bright third quarter, particularly in the US and Europe, because of what it described as stronger than anticipated demand.
As well as booming PC sales, it has managed to cut its costs by laying off staff and improving its manufacturing process over the past year.
The combined factors will drive third quarter revenue to exceed Intel's expectations. When it released its second quarter results in July, it had warned of flat results.
Now it thinks its revenue will be up by nearly 10 per cent, amounting to $5.9 billion. Gross margin will rise several points from the 49 per cent it reported in Q2 to 52 per cent.
Part of the improved revenues in Q3, however, is down to Intel's staff reductions and increased efficiency at its manufacturing plants.
The giant plans to spend nearly $3 billion on research and development this year, while capital spending for 1998 will amount to $4.7 billion, more or less the same as the same period in 1997. That estimate includes the acquisition of Digital Equipment's Alpha manufacturing facilities, which, ironically, it will use to build chips for Digital's new owner Compaq.
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