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Intel performs well in Q4, ramps up .18 micron

And predicts 50 per cent growth in networks this year

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Intel turned in good gains for its financial quarter to the end of its fourth quarter, with revenues rising by eight per cent to $8.2 billion, compared to $7.61 billion for the equivalent quarter last year. Net profit for the quarter amounted to $2.11 billion, compared to $2.06 billion for the equivalent period in the last quarter last year. Craig Barrett, CEO of Intel, said that his company's networking, wireless and internet businesses were likely to grow by as much as 50 per cent during the course of this year. Barrett, however, warned that seasonal factors would make Intel's Q1 this year slightly weaker than the results for Q4. Those seasonal factors are likely to be insufficiency of Intel's new Coppermine processors. But chief financial officer Andy Bryant said that Intel's current inventory was not what the company desired during the period, although the .18 micron Coppermine process had successfully ramped during the period. Plans for the coming year included the introduction of .13 micron technology, he said in a conference call. Paul Otellini, executive VP of Intel's architecture group, said the company had set record shipments for chips, chipsets, and flash memory. Intel had shipped "millions" of .18 micron technology during the quarter. "Supply was tight all quarter," he said. Europe was helped by a surge in people buying PCs for the Internet, he said. The 800MHz Pentium III Coppermine was shipping in quantity, Otellini said. The 810 is now its highest selling chipset, he said. Software development systems for the Itanium were shipped to both software and hardware developers. Systems will be on the market in the second half of the year. He said Intel was buying more .18 micron equipment this year to ramp production. On 300mm (12-inch wafers), Intel said it did not want to transition both geometry and design change at once. Over the next years there will be investment with payback intended over the next several years. Intel thinks that the performance processors it is currently shipping are more than sufficient for Windows 2000 for most of this year. By the end of this year, transition to .18 micron will be complete and Otellini said .13 micron will be brought onstream gradually over the next two to three years. Otellini said that "supply tightness" on chips will ease over the course of this quarter. He said that Intel's Timna, system on a chip product, would appear in the peak selling season later this year, as a bulk product. McKinley, he said, it was hard to give an early date on. Intel would not say how fast or when the i820 chipset would move to the Solano chipset. Solano would replace the integrated graphics part of its product line, he said. There were no constraints on Pentium III Xeon processors or chipsets, Intel said. Larger integrated cache versions of the Xeon will appear during this quarter. For servers, the question was application specific, making cache important. Intel refused to comment on Gateway's decision last week to use AMD processors. The Celeron family will be taken to .18 micron during the first half of this year. Integrated Celerons will appear, with better performance and at lower prices. The company is setting up Intel Capital as a name for its equity investments in other companies. ®

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