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Intel: No Y2K effect
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October 28, 1999: 7:42 p.m. ET
Chip maker says business won't be bit by Y2K bug; plans more acquisitions
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NEW YORK (CNNfn) - Intel Corp. on Thursday said it expects little or no Year 2000-related effects on its business outlook.
The chip firm's statement comes on the heels of Y2K-related warnings from IBM (IBM) and Hewlett-Packard Co. (HWP).
Many large corporations are hesitant to commit to large-scale technology purchases until they are confident that their Y2K-remediation programs are complete.
But Y2K concerns could provide a boost to the PC market, for which Intel (INTC) is the dominant supplier of chips. Demand for PCs is likely to remain strong as consumers buy computers to ensure Y2K compliance.
Sean Maloney, an Intel senior vice president, said current business conditions indicate the firm should see "little or no impact" from Y2K-related issues.
Maloney noted that the rapid growth of the Internet is driving demand for high-end servers, which bring in higher gross profit margins.
Beyond the PC
During a webcast in which Intel officials outlined the company's plans for 2000, Intel Chief Executive Officer Craig Barrett said the firm will focus on growth areas beyond PCs.
Barrett noted that Intel will work to gain market share in the market for flash memory chips, which power such devices as cell phones and cable set-top boxes.
Barrett also said Intel, which has acquired nine companies this year as it expands into other markets, will make more acquisitions in the communications and networking markets.
"We are looking to be the preeminent building-block supplier to the World Wide Web economy," Barrett said.
In its core PC business, Intel plans to break the 1-gigahertz barrier with a new chip - code named Willamette -- to be introduced in the second half of 2000.
Paul Otellini, general manager, Intel architecture business group, said the company will release an 800-MHz Pentium III chip in the first half of the year.
Otellini also said Intel will release a single-chip processor - meaning the memory cache is included on the processor - in time for computers shipping during next year's back-to-school season.
Earlier this month, Intel missed analysts' third-quarter estimates, citing a decline in chip prices for its weak performance.
Otellini declined to comment on whether Intel expects the decline in chip prices to continue.
Intel shares rose 2-3/4 to close at 72-3/16 in Thursday trade.
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Intel
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