More trouble in the chip industry

Chip companies, amid slackening demand, lower forecasts and cut jobs

Intel of Santa Clara, […] significantly scaled back its estimate for fourth-quarter revenue. Instead of the $10.1 billion to $10.9 billion it predicted it would take in, the company said it now predicts its revenue will be closer to $9 billion, plus or minus $300 million, a drop of at least 8 percent.

Applied Materials of Santa Clara, […] said its profit in the most recent quarter was 45 percent lower than for the same period last year and announced it will trim 1,800 positions, or about 12 percent of its workforce.

Citing weak demand for cell phones and other gadgets that use chips, Santa Clara-based National Semiconductor lowered its sales forecast by at least 9 percent for the next quarter and said it will reduce its roughly 7,000 positions by about 330.

A month ago, when it reported third-quarter revenue of $10.2 billion, Intel predicted its business would stay flat through the fourth quarter. But Paul Otellini […] promised to provide analysts with an updated fourth-quarter forecast on Dec. 4. Intel chose to provide that revised forecast Wednesday because mounting evidence had made it clear the company’s previous estimate was far too optimistic.

“We saw in just the last few weeks a really rapid deceleration in demand and that’s what prompted the update now,” said spokesman Chuck Mulloy. “We just decided, ‘Why wait until Dec. 4. We know what the answer is now.’ “

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