Chip giants cook up healthy profits in Q2

Rival chip manufacturers Intel and AMD both announced increased profits for their second quarters last week.

Rival chip manufacturers Intel and AMD both announced increased profits for their second quarters last week.

Despite continuing supply problems, Intel reported turnover up 23 per cent to $8.3bn (£5.5bn) for its second quarter. Profit almost doubled to $3.5bn before acquisition costs, but that figure included $2.3bn from the sale of investments.

"We are satisfied with the results in what is normally a seasonally slow quarter," said Craig Barrett, Intel's chief executive.

"We saw strong demand in all business groups, especially for microprocessors, Flash memory and networking silicon."

AMD's turnover for its second quarter rose to $1.2bn, up 97 per cent compared with the same quarter last year. Net profit was $207m. Sales of PC processors increased by 106 per cent and Flash memory by 118 per cent compared with last year.

AMD expects that sales of its Athlon and Duron processors will double next quarter.

Jerry Sanders, AMD's chairman, predicted chips will remain in short supply for the rest of the year, which should prevent price wars. "We have such a competitive product that we don't have to cut our prices," he said.

Meanwhile, Intel has scheduled the release date of its latest 1.13Ghz Pentium III processor for 31 July.

Intel also announced that it has postponed the debut of its first 64bit processor for at least three months. Company officials confirmed that the new processor, dubbed Itanium, will not arrive until the fourth quarter.

• ARM ended its Q2 with pre-tax profits rising by 117 per cent to £8.3m. Turnover was up 60 per cent to £23.1m.