Intel Reports Third Quarter Revenue Of $US6.5 Bn

News Release

Intel Reports Third Quarter Revenue Of $US6.5 Billion

Third Quarter Earnings Excluding Acquisition-Related Costs* $US0.10 Per Share
Third Quarter Earnings Per Share $US0.02

AUCKLAND, October 17, 2001 — Intel today announced third quarter revenue of $US6.5 billion, down 25 percent from the third quarter of 2000 and up 3 percent sequentially. Asia Pacific contributed 31 percent of overall Intel revenues, up from 27 percent from the third quarter of 2000 and equal to that of the previous quarter.

For the third quarter, net income excluding acquisition-related costs was $US655 million, down 77 percent from the third quarter of 2000 and 23 percent sequentially. Third quarter earnings excluding acquisition-related costs were $US0.10 per share, a decrease of 76 percent from
$US0.41 in the third quarter of 2000 and 17 percent sequentially.

Including acquisition-related costs in accordance with generally accepted accounting principles, third quarter net income was $US106 million, down 96 percent from the third quarter of 2000 and 46 percent sequentially. Earnings per share were $US0.02, down 94 percent from $US0.36 in the third quarter of 2000 and 33 percent sequentially.

Intel reduced its third-quarter tax provision by $US100 million due to an increase in the calculated tax benefit related to export sales for 2000, including the impact of a revision in the tax law. Acquisition-related costs in the third quarter consisted of $US609 million of amortisation of goodwill and other acquisition-related intangibles and costs.

“Intel delivered solid third quarter results in a turbulent environment, with revenue and microprocessor units up from the second quarter,” said Craig R. Barrett, president and chief executive officer. “The actions taken to accelerate our desktop product roadmap have generated strong demand for the Intel® Pentium® 4 processor and the Intel® 845 chipset platform. In addition, the ramp of our 0.13-micron process technology remains ahead of schedule with three fabs currently on line and another expected by the end of the year.”

“While economic conditions worldwide remain weak, we continue to strengthen our competitive position and expect to see moderate unit growth in microprocessors and flash memory in the fourth quarter,” he continued. “We remain confident that our strategy for supplying the key computing and communications building blocks for the worldwide Internet build-out positions us for higher levels of growth when the economy recovers.”

During the quarter, Intel introduced the Pentium 4 processor at 2.0 GHz and 1.9 GHz, the
world’s fastest microprocessors for desktop PCs. At the Intel Developer Forum, the company also demonstrated a future Pentium 4 processor based on 0.13-micron circuitry and running at 3.5 GHz, noting that the Pentium 4 processor’s microarchitecture is designed to scale to 10 GHz over its lifetime.

During the quarter, Intel demonstrated a new processor design breakthrough called Hyper-Threading technology, which can improve system performance by as much as 30 percent. Hyper-Threading technology is expected to be introduced in Intel® Xeon™ processors for servers in 2002 and incorporated into a variety of Intel products over the next few years.

The company also announced that leading makers of PDAs including Casio, Compaq, Hewlett-Packard, NEC, Symbol Technologies and Toshiba have selected the Intel® StrongARM* SA-1110 processor to power their next generation of communications products.

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About Intel
Intel, the world’s largest chip maker, is also a leading manufacturer of computer, networking and communications products. Additional information about Intel is available at www.intel.co.nz

Intel is a registered trademark of Intel Corporation or its subsidiaries in the United States and other countries.

* Other names and brands may be claimed as the property of others.

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