Chief Executive Officer Craig Barrett offered some cautiously optimistic comments about the chip cycle and prospects for enterprise spending Thursday.
In a meeting with analysts, Barrett said he saw "indications around the world of a regrowth of information technology" and that he sees "relatively robust growth" for the semiconductor industry overall. But he added, "we don't expect a major, major upgrade cycle; we're not forecasting that."
Some observers credited Barrett's comments while helping the
turn higher Thursday after its early decline. But Intel investors reacted to the news with muted enthusiasm; in late afternoon trading the stock was up 15 cents or 0.1% to $32.54.
Barrett noted that market research groups and analysts expect the semiconductor market to show growth of about 20% in 2004.
Though it will be difficult for Intel to grow faster than the market in PC chips -- a space it commands, with about 80% market share -- the company aims to take share in the highly segmented communications arena. Already it's had success with its Centrino chips, which combine Wi-Fi (wireless fidelity) capabilities with processors optimized for use in notebooks.
"We have a huge opportunity to take in this space as convergence happens. Long-term I still think it's one of the biggest growth opportunities," said Barrett.
Barrett also said he sees promise in developing markets like China, Russia and Turkey, with the biggest dollar opportunities in Asia Pacific, expected to chip in $4.8 billion in sales this year. Europe, Middle East and Africa should account for $1.6 billion and Latin America for $0.4 billion.
Intel's overall revenues are expected to total $29.9 billion.
On the demand side, he mostly stuck to the same script the company has relied on before, saying Intel hopes to benefit from an uptick in spending by U.S. based big companies next year but that a "major, major upgrade" doesn't seem likely.
Still, "we expect the U.S. to continue to be our largest market," Barrett said. "We could start to see enterprise investment in