Intel, AMD Raise Sales Forecasts for 4th Quarter

In another sign the semiconductor industry is recovering, Intel Corp. and longtime rival Advanced Micro Devices Inc. on Thursday boosted their sales forecasts for the fourth quarter.

Both companies cited strength in microprocessors, the brains of all power computers, suggesting that holiday sales of personal computers may not be quite as grim as many had feared.

Shares of Intel slipped 45 cents to $34.16 in regular Nasdaq trading, then rose to $34.80 in after-hours trading following its announcement. AMD added 1 cent to $16.25 on the New York Stock Exchange in regular trading, then surged to $17.80 after hours on its news.

Intel indicated that it now sees sales for the period ending Dec. 29 at the high end of its previously forecast range of $6.2 billion to $6.8 billion and said they may hit as high at $6.9 billion.

“The quarter is progressing at the high end of our expectations and may even exceed them,” Andy Bryant, Intel’s chief financial officer, said in a conference call. “Business appears to have returned to seasonal patterns.”

AMD expects sales to rise 10% or a bit more from the third quarter’s $765.9 million. Last month, the Sunnyvale, Calif.-based company forecast flat to single-digit growth in sales.

Typically, fourth-quarter sales are higher than in the third, paced by holiday sales. Intel also said that supplies for its Pentium 4 chips are tight and that it can’t get enough chips to customers who want them, which could be benefiting AMD.

Intel has been moving as quickly and as aggressively as possible to make only the Pentium 4 chip and phase out the less expensive Pentium III chip by the end of the year.

Intel and other semiconductor makers have suffered a bruising year of falling sales and profits as the $200-billion industry has been mired in its worst-ever slump amid slowing economies and weak demand.

During earlier conference calls, the companies said uncertainty after the Sept. 11 terrorist attacks would mute any seasonal bump in sales. It now appears the industry was not as hard hit as had been expected.

Neither company revised expectations for profit in the quarter.

Separately, National Semiconductor Corp. reported a narrower fiscal second-quarter loss than had been forecast as sales outpaced expectations.

National, whose chips are found in mobile phones, flat-panel displays and other electronic devices, said it expects comparable sales performance in its third quarter.

The news sent shares of the Santa Clara, Calif.-based company up $1.98, or 6%, to $34.60 on the NYSE.

For the quarter ended Nov. 25, National Semi reported a loss of $46.6 million, or 26 cents a share, contrasted with a year-earlier profit of $106.7 million, or 56 cents. Sales fell 38% to $366.5 million.

Analysts on average expected a 31-cent loss on revenue of $357.1million.