"We believe PC growth rates have moderated over the course of the past few quarters, leading to slower chip-level inventory reductions at our customers and affecting our revenue in the first half of the year."Naturally, Otellini stresses the upcoming third quarter launch of new Core-based chips, including Conroe, which he says will give Intel "performance leadership across the server, desktop and mobile segments." He also touts "excellent operational progress," along with good market penetration of the new Centrino Duo and Viiv platforms. However, Intel's second quarter outlook is still grim, with expected revenues of $8.0-8.6 billion and 49% gross margin—down from last year's $9.2 billion and 56.4% for the second quarter.
In contrast to Intel's troubles, AMD boasted stellar first quarter results last week. Its net sales were up 70.5% from the same time frame last year, and operating income rose by an impressive 304.7%. Gross margin also increased to 58.5%, up from 52.7% a year ago. AMD does nonetheless expect similarly poor second quarter results, with sales due to be "flat to slightly down" from this quarter.