SAN FRANCISCO -- Intel's (INTC - Get Report) chief executive believes the current economic turmoil is the worst in his lifetime, and Wall Street is increasingly of the mind that the chip giant will not escape the crisis unscathed.
During an interview at a technology conference in San Francisco on Thursday, Intel CEO Paul Otellini reportedly told the audience that the U.S. is in a recession that will last for two to three quarters, and that the slowdown will spread to other regions of the world.
"My sense is this is the deepest one I have seen in my lifetime," Otellini said, according to the Barron's Tech Trader Daily blog.
Shares of Intel tumbled 7.5%, or $1.13, to $13.93 in midday trading Thursday, along with a broader market decline that had the Dow Jones Industrial Average off 444 points.Intel is the world's No.1 maker of microprocessors used in PCs and servers, with about 80% market share. That scale provides Intel with a great deal of financial stability, but it also makes it harder for Intel to avoid the trends in the overall market. Dell (DELL - Get Report), the world's second largest PC maker and a major Intel customer, has warned that spending on technology by corporations and consumers is slowing in the U.S., Western Europe and parts of Asia. On Wednesday, Intel's rival Advanced Micro Devices (AMD - Get Report) said that it would lay off 500 employees, or 3% of its workforce, as it seeks to lower operating expenses and return the company to profitability. In a note to investors Thursday, American Technology Research analyst Doug Freedman reduced his sales estimate for Intel in the fourth quarter. Instead of revenue increasing 2% sequentially, Intel's revenue will be flat, Freedman said.