Profits slump at chip giant Intel

Intel aims to be 'leaner' and 'more agile'

Intel, the world's largest computer chip manufacturer, has reported a 56% slump in quarterly profits as it competes in a price war with rival AMD.

Net profit for the three months to 1 July came in at $885m (£481m), down from $2bn at the same time last year.

Intel forecast sales in the current quarter would reach $8.3-$8.8bn, less than the $9bn forecast by analysts.

The group is nearing the end of a cost-cutting programme that has resulted in 1,000 managers being axed.

The company has been struggling to maintain profit margins as it competes with AMD.

Profits are also struggling as increasing demand for budget PCs means that cheaper chips used to build the machines are making up an increasing percentage of its sales.

Meanwhile, analysts have also expressed concerns that Intel stock levels have been running dangerously high, which could lead to more products being written-off or sold-off cheaply.

The company said a range of new chip launches would help it increase its market share in the second half of the year.