Intel Needs To Crunch Some Chips

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Intel Needs To Crunch Some Chips

By: David Utter
2006-04-28

Competition from Advanced Micro Designs, customers waiting for newer chips, and generally slower demand in the most recent fiscal quarter bashed Intel's profits by 38 percent; a reorganization has been planned.

Intel Needs To Crunch Some Chips

Intel (INTC) CEO Paul Otellini isn't afraid to plunge both hands into the chip bowl and leave some crushed crumbs behind in order to shake Intel out of its doldrums.

A fall of 38 percent left Intel's first quarter net income at $1.3 billion, compared to the same quarter in 2005. Otellini told analysts at a New York meeting that Intel would "take a hard look at individual businesses and projects that are losing money," the Wall Street Journal reported.

"We will restructure, resize and repurpose Intel Corp. for where we think the business is going," Otellini said . "Every part of Intel will be included in this. No stone will be left unturned, or unlooked at."

Some believe that layoffs, at least on a modest scale, will be the way Intel responds to the problem. Investors have been pushing Intel stock upward since a lull on Tuesday. Shares of the company closed up 59 cents to 20.08 in heavy trading.

Apple made Samsung smile broadly, as the Korean technology giant found itself in the chips courtesy of a big chip win. Next-generation media processors for the iPods will come from Samsung instead of former supplier PortalPlayer, said a TG Daily report.

Sansung already owns Apple's NAND flash memory business. In securing the processor business, Samsung may be able to do something Apple and its investors would love: improve the profit margins for the multi-million unit selling iPod.

PortalPlayer's Apple business may have represented as much as 95 percent of its total business. Losing Apple to Samsung may end up shutting down PortalPlayer.

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Tags: Intel, Apple, Samsung

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About the Author:
David Utter is a staff writer for InternetFinancialNews and WebProNews covering technology and business.


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