Industry bellwether Intel has given the tech sector a much needed boost by smashing expectations for its second quarter.

The chip giant posted a 25 per cent rise in net profits in the quarter to $1.6bn (£798m), while earnings per share of 28 cents trounced the analyst consensus. Revenue also beat expectations, rising 9 per cent to $9.47bn.

Intel, the first of several Silicon Valley giants set to post results in the coming weeks, was also bullish about the present quarter. It predicted Q3 revenues would hit between $10bn and $10.6bn and forecasted that gross margins would improve from 55.4 per cent to 58 per cent sequentially.

"Intel had another strong quarter with revenue at the high end of expectations and earnings up substantially year over year," said Intel chief executive Paul Otellini.

"As we enter the second half, demand remains strong for our microprocessor and chipset products in all segments and all parts of the globe."