Jack Robertson EBN (06/05/2003 7:00 PM EST)

Intel Corp. late Thursday estimated its second quarter revenue would be in a range of $6.6 billion to $6.8 billion, which would be an increase over $6.5 billion in the first quarter this year and $6.3 billion for the year-ago period.

Andy Bryant, executive vice president and chief financial officer, said if actual second quarter revenue this year came in at the $6.7 million midpoint of the projection, that would be a 6% gain over the same period of 2002.

In April Intel had forecast revenue for the second quarter at between $6.4 billion to $7 billion.

Bryant told a conference call with financial analysts that Intel's gross margin in the second period would be about 50%, "give or take a couple of percentage points." For the full year he estimated a gross margin of around 51%.

He said Intel is on track in 2003 to spend $4 billion on R&D and $3.7 billion "plus-or-minus $200 million" on capital investment. Both totals were the same as previously projected.

Although Bryant refrained from giving a specific breakdown of revenue by business segments, he said the Intel Architecture processor and chipset group will achieve sales "at the high end of our projections going into this quarter." By contrast, the communications segment and especially flash memory within the group "remains weak."

The executive said Intel is still pushing to regain flash memory market share that it lost in the first quarter when the company tried unsuccessfully to raise its flash chip prices.

"We stubbed our toe at the beginning of the year from the price action. It will take a while to recover, but we are doing all we can" to regain market share that was lost.

EBN Monday reported that Semico Research Corp. had estimated Intel, due to customer rejection of its attempt to raise prices, had dropped at the end of the first quarter to a NOR flash market share of 26%, down from 37% at the end of 2002.

Bryant said Intel is continuing to lower its own inventory levels in anticipation of the introduction of next generation processors built with 90nm process technology.

"We will be ramping 90nm fabs in the second half (of 2003) so we don't want to build up a lot of inventory."

Asked about Intel's projected $100 million investment in Elpida Memory Inc., Bryant said, "It looked like an intriguing investment. We were interested in (Elpida's) overall business plan" for ramping up advanced technology DRAMs and production increases.