Intel says credit crises could slow chip demand, hurt suppliers
Regulatory filing shows chipmaker concerned about microprocessor demand.
By Dave Hannon -- Purchasing, 10/31/2008 12:22:00 PM
In a recent filing with the SEC, electronics giant Intel said what a lot of companies in a lot of industries are thinking but not yet saying: The current credit crunch could make it more difficult for its customers to buy its chips and put some of its key suppliers out of business.
"There could be a number of follow-on effects from the credit crisis on Intel's business, including insolvency of key suppliers resulting in product delays," Intel said in its third-quarter filing.
The filing confirms comments made earlier this month in Beijing by Intel CEO Paul Otellini, saying: "It is reasonable to assume that with the number of financial institutions around the world in trouble that there will be some disruption in their purchases.”
Intel cut its 2008 capital spending plans slightly to around $5 billion from $5.2 billion. The firm’s R&D spending decreased 3%, in the third quarter “due to lower product development costs and the divestiture of the NOR flash memory business partially offset by higher profit-dependent compensation expenses.”
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