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Last Updated: Friday, 10 June, 2005, 05:27 GMT 06:27 UK
Intel outlook boosts chip market
An Intel employee shows off one of the firm's latest processors
Intel's computer chips are used in the majority of personal computers
Strong worldwide demand for laptop computers is to deliver another boost to chipmaker Intel, the firm has said.

According to the US chip giant, sales and profits for the three months to June are set to match or exceed its previous highest estimates.

A switch by consumers and businesses to laptops from desktop PCs is driving sales of the Centrino chip, Intel said.

But the firm's shares fell in after hours trading as investors were already expecting sky-high results.

No build-up

Intel stock has risen more than 25% in the past two months.

Intel's mid-quarter update said it expected to make sales of between $9.1bn (5bn) and $9.3bn, up from its previous estimate of between $8.6bn and $9.2bn.

While the firm did not put a figure on its profits, it said that gross margins would probably be 57% rather than the 56% it had forecast in April.

The outlook puts an optimistic gloss on the chip market, and follows a similarly rosy statement from Texas Instruments earlier this week.

On Wednesday, the Semiconductor Industry Association said it expected 6% growth in the sector during 2005, having formerly warned the market would be flat.

A feared inventory build-up, the SIA said, had failed to materialise.

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