Intel, the world's biggest chipmaker, expects second-half demand to be lower than it was a year earlier, despite a forecast return to normal demand patterns that should see an improvement from the first half.
"For sure," Chief Financial Officer Stacy Smith told Reuters on May 28 when asked whether levels would be below those of last year. "We've seen a lot of demand destruction as a result of this downturn."
The second half of the year is typically stronger for chipmakers and the electronics companies they supply, due to the back-to-school season in August and September and the Christmas holiday in December.
Smith said in an interview that utilisation of Intel's factory capacity, which fell to a historic low of 40 percent on average in the first quarter, should return to "healthy" levels of a little below 80 percent in the second half. "Eighty to 85 percent is the optimum, but if you assume that at a little less than that you're getting into the healthy range, I think we'll be back in that healthy range by the time we get to the second half of this year," he said.
Smith said depressed company valuations could spur Intel to make more acquisitions than before, but that the company's strategy of the last decade of buying small firms attractive for their intellectual property would not change. He added that Intel was still talking to the European Commission about how and when it would pay the record 1.06 billion euro ($1.47 billion) fine the body imposed for antitrust violations, but would probably take the charge this quarter.