Intel Boosts 2Q ForecastIntel Boosts 2Q Forecast

A strong market for notebooks is giving chip maker Intel a significant boost, as the Santa Clara, Calif., company now says its second quarter revenue could be higher than expected. Intel's second quarter ends July 2.

In its Thursday mid-quarter update, Intel said executives now expect sales for the period to range between $9.1 billion and $9.3 billion. That's an increase in range from the $8.6 billion to $9.2 billion Intel forecast as recently as April.

In addition, Intel said it now expects gross margins to be 57 percent "plus or minus a point." In April, the company had projected gross margins around 56 percent.

Intel Chief Financial Officer Andy Bryant told analysts in a conference call late Thursday that the company's biggest gains stemmed from worldwide demand for notebook computers.

"The real story is the strength of the mobile [business]," Bryant said. "We expected it to be stronger when we began the quarter, and it's done better than we expected."

Bryant said, however, that Intel is still struggling to produce enough chipsets, even though microprocessor inventories are adequate.

"Chipsets -- I'm still behind," Bryant said. "Those factories are operating at 100 percent-plus. I expect that to continue for a period of time." The tight supply of chipsets dates back to the first quarter of the year. Bryant had noted in April that it was becoming more difficult to meet orders.

Intel is scheduled to report its earnings for the full quarter July 19.

THIS ARTICLE WAS UPDATED LATE THURSDAY WITH ADDITIONAL INFORMATION.