We’re seeing a conversion to mobile (computers) across the world faster than we thought, said Intel CFO Andy Bryant, in a conference call. Demand feels pretty good right now. It’s pretty simple.
While Bryant declined to characterize his expectations beyond the current quarter, he said he doesn’t see inventory building and that demand seems to be real.
Indeed, demand is outstripping supply for some Intel chipsets, Bryant said. I have more demand than I can supply. I’m struggling to build enough parts to meet my customers demand. That has meant some Intel chip-making factories are running at 100% capacity, which includes using maintenance capacity for actual production.
Bryant said the company is seeing demand strength in all geographies. The factories are pretty full everywhere you go in Intel right now.
He said he does not expect to see any factory underutilization charges during the quarter, which ends July 2.
The financial effects of a fire in early May at its subcontract manufacturer Advanced Semiconductor Engineering Inc in Taiwan will minimal, Bryant said, and will be felt more strongly in its Flash memory business. It’s not a big factor in Intel’s financial results, he said.
Santa Clara, California-based Intel now expects slightly higher gross margins of about 57% versus 56% it previously guided. And gains from equity investments and interest will be about $100m, higher than the previous expected $70m.
Also Intel’s tax rate is expected to be just 26% versus 31% as previously expected, mostly due to an increase in estimated R&D tax credits.
