The third quarter hasn't started on an auspicious note for the world's leading semiconductor company.

Leading up to

Intel's

(INTC) - Get Report

midquarter update Thursday, analysts are speculating that the giant chipmaker may have to ratchet down its forecast for gross margins. That follows comments from company CEO Craig Barrett that suggest revenue will come in at the low end of guidance it gave in July.

The company said then that sales were likely to range from flat to almost 10% growth.

It's still a little early for handicapping to start in earnest, because Intel's third quarter is the most back-end loaded of the year, with some 40% to 50% of shipments likely to take place in September. On top of that, plenty of technology companies have complained of murky visibility.

But several recent indicators suggest the third quarter could be uncomfortable for Intel, sandwiched between inclement supply and demand trends.

On the supply side, the company pushed through price cuts of up to 50% on its line of microprocessors on Sept. 1 -- a move that's bound to hurt its average selling prices. In a research note

paring back his revenue estimates, Lehman Brothers analyst Dan Niles characterized the price cuts as "severe." "It is hard for us to see ASPs do much other than go down in Q3 and Q4," he wrote. Lehman hasn't done recent banking for Intel.

Microprocessor prices already have been under pressure, posting a 0.9% drop in July, according to newly released data from the Semiconductor Industry Association. Likewise, sales of microprocessors were down very slightly, declining 0.2% for the month.

On the demand side, Intel's customers appear to be favoring its cheaper, low-end processors. That trend, which will further weigh on ASPs, became apparent in the company's second-quarter results.

Back then, Intel management expected the mix to shift toward higher-end products again by the third quarter. But lately, doubts have emerged over whether that's happened.

"It seems to me that hasn't been a dramatic shift at least in end-market consumption" of processors, says Banc of America analyst Douglas Lee. "From the perspective of people in the food chain, I don't get the sense that the high end is picking up inordinately." If that turns out to be true, Intel's processor mix could remain similar to the June quarter, and margins could come in a few points below the 51% target, he observed in a research note.

Banc of America hasn't done banking for Intel.

Granted, there's always a chance that Sept. 1 price cuts could make buyers more amenable to high-end processors.

But most of Intel's top-tier customers were effectively given the price cuts in the second week of August, noted Niles. For that reason, he said in a note, it's "hard for us to believe that there will be a surge following the price cuts."

Still, for all the nervousness about Intel's near-term outlook, the company remains a relative bastion of strength in the volatile chip world. "I'm still constructive on Intel, bearish as I am on semiconductors," says Lee, who has a buy rating on the stock. "Intel's outlook is better than most, though the stock has gotten creamed

lately. Any glimmer of an IT pickup will have a direct positive impact on the stock. Looking into next year, either the whole semi market continues to tank, in which case Intel goes down less than most, or it does pick up. If that's the case, it will outperform."

At current levels, he believes, the stock has "effectively priced in the risk of a 1% to 2% gross margin contraction."

"As many Intel bulls have become belated bears and estimates get lowered to reasonable levels, the stock should become more interesting," Niles said in his note. But for now, he maintains his underweight rating on the stock.

Chips: The July Scorecard

Meanwhile, though sales of microchips have looked pretty sorry lately, data from the SIA show that other types of chips have held up better. According to the trade group's president, George Scalise, demand for chips used in digital consumer devices such as DVDs, video games and digital cameras helped boost July sales nearly 3% higher than June sales.

The SIA claims that the results from July "confirm a moderate but sustainable recovery" is under way for semiconductors. It predicts sequential growth of 7% to 9% in the third quarter.

But that forecast looks a tad optimistic in light of recent comments from semiconductor companies themselves. Tuesday,

Fairchild Semiconductor

(FCS)

warned that revenue might fall below second-quarter levels. Fairchild's outlook is especially noteworthy since it sells to such a wide array of markets, including automotive, industrial and consumer.

Other broad-based chip vendors also have recently forecast sequential sales growth in the low single digits.

Altera

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, which makes programmable logic devices used in communications, computer applications and industrial equipment, said revenue likely will range from flat to up 2% sequentially.

Analog Devices

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, which sells semiconductors to industry, computing and consumer end markets, has predicted growth of no more than 3%.