Chip Makers No Longer 'Drowning'Chip Makers No Longer 'Drowning'

Leading chipmakers Intel and AMD Thursday said fourth-quarter sales would be better than originally anticipated.

Intel now expects fourth-quarter revenue of $6.8 billion to $7 billion, up from the $6.5 billion to $6.9 billion projected earlier this year. It might even match the $7 billion in sales Intel reported for the fourth quarter of 2001. The company says the revenue bump comes primarily from strong Intel Architecture sales in Asia.

AMD says PC processor demand and flash memory products could push fourth-quarter sales to $700 million, better than originally expected but still well below the $952 million racked up a year ago.

"They're saying that they're not drowning anymore," says Peter Kastner, Aberdeen Group's chief research officer. What remains to be seen is whether buyers will buy more PCs and servers. "We don't see any killer apps, but the Y2K generation of PCs is getting a little long in the tooth."