The 40-cent annual dividend represents $2.41 billion out the door annually for Intel, which has a little more than 6 billion shares outstanding. The yield on its stock, which closed Wednesday at $24.80, moves to 1.6% from 1.3%.

Combined with $7.8 billion left over from a previous program, Intel now has $25 billion in repurchases authorized. At Wednesday's close, that sum would cover more than 1 billion shares, or about 17% of the company's outstanding shares. Intel's market capitalization is about $150 billion.

An Intel share bought back at $24.80 would cost 17.3 times this year's earnings consensus and 15.4 times next year's forecast.

"Intel's investments in R&D and capital are enabling the company to post its third consecutive year of double-digit revenue growth," the company said. "At the same time, we are returning record amounts of cash to our stockholders with one of the highest dividend yields in the technology industry and one of the largest share buyback programs of any company. Today's announcement signals our confidence in the growth, earnings and cash generating potential of our business."

Intel, which has about 313 million shares available under a previous buyback authorization, said it repurchased more than 300 million shares for about $7.5 billion through the first three quarters of 2005.

The stock was recently up 31 cents, or 1.3%, to $25.11.