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SAN FRANCISCO -- To flatter is divine.

Robertson Stephens

analyst Eric Rothdeutsch introduced


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at this firm's tech conference here Monday with the assertion that demand for chips will pick up in the second half of the year. "From your lips to God's ears," implored Paul Otellini, executive vice president at Intel as he stepped to the microphone. It made for a nice reversal, the analyst being hopeful and the chipmaker devoid of faith.

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Otellini wasn't ready to invoke any miracle saves when describing Intel's business status: "The pattern of the last six weeks is consistent with the

guidance we've given," said Otellini. No turning water into wine. He did affirm that Intel plans to keep churning out the products, slowdown or no. "You don't save your way out of a recession," Otellini said, attributing the lesson to Gordon Moore's teaching. "You get out of the recession by selling new products."

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And so it was time to detail Intel's inroads, a 4% market share in eight-processor servers, a 12% position in four-processor servers, which are dominated by


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, and 89% of its home base in the one- and two-processor servers. While the server business constricted to 17% growth in 2000 from a 30% leap in 1999, Otellini attributed that to dot-com slowdowns and overbuying in 1999, both of which should be working their way through the system.

In the notebook category, Intel is happy to see a laptop market that's finally separating out into different categories -- full size, thin, mini and sub-notebooks, giving Intel an opportunity to differentiate its notebook chips for different vendors.

The company expects to release a

Pentium 4

version of the Xeon codenamed Foster in the second quarter, and Otellini said expect sub-$1,000 machines with Pentium 4 chips by the end of 2001. With PC sales down, Otellini reasoned, discriminating consumers buy better machines with Intel Pentium 4s -- for you speed skeptics, he added that users will want those extra megahertz for their MP3 players, camcorders, digital camera shots and other consumer-electronics style toys.

Again we hear it, "This is the time to invest, while others can't," he said. Now, to wait for the miracles.