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Intel Fourth-Quarter Revenue Of $Us8.74 Billion

News Release

Intel Fourth-Quarter Revenue Of $Us8.74 Billion At Record Level


Intel Corporation today announced fourth-quarter revenue of $US8.74 billion, up 12 percent sequentially and up 22 percent year-over-year. Fourth-quarter revenue was slightly higher than the previous record of $US8.73 billion set in the third quarter of 2000.

Fourth-quarter net income was $US2.2 billion, up 31 percent sequentially and up 107 percent year-over-year. Earnings per share were $US0.33, up 32 percent sequentially and up 106 percent from $US0.16 in the fourth quarter of 2002.

“We ended the year on a high note as ongoing strength in emerging markets coupled with improving demand in established markets drove revenue to record levels,” said Craig R. Barrett, Intel chief executive officer. “Intel’s substantial investments in capital and R&D over the past few years allowed us to ship record microprocessor units in 2003 and introduce exciting new products such as Intel® Centrino™ mobile technology.

“In 2004, our focus will be to drive double-digit growth through technology leadership and global market expansion, and by pursuing adjacent opportunities in communications and the digital home, while using our 90-nanometer and 300-millimeter factories to reduce costs and improve profitability.”

The fourth quarter 2003 results included the impact of a $US611-million goodwill write-down related to the Wireless Communications and Computing Group (WCCG). At the time of the fourth-quarter Business Update, the company also anticipated a tax benefit of approximately $US200 million related to a divestiture.

Full-Year Results
Revenue for 2003 was $US30.1 billion, up 13 percent from $US26.8 billion in 2002. Net income was $US5.6 billion, up 81 percent from $US3.1 billion in 2002. Earnings per share were $US0.85, up 85 percent from $US0.46 in 2002.

BUSINESS OUTLOOK

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after Jan. 13, 2004.

** Revenue in the first quarter is expected to be between $US7.9 billion and $US8.5 billion.
** R&D spending is expected to be approximately $US4.8 billion in 2004, as compared to $US4.4 billion in 2003. The expected increase in R&D spending is primarily driven by development of the company’s next-generation 65-nm process technology, scheduled for production in 2005 on 300-mm wafers.

FOURTH QUARTER REVIEW AND RECENT HIGHLIGHTS

Key Product Trends (Sequential)
** Intel Architecture microprocessor units set a record. The average selling price was slightly higher primarily due to a richer mix within server processors.
** Chipset units were approximately flat and at record levels.
** Motherboard units set a record.
** Ethernet connectivity product units were higher and at record levels.

Intel Architecture Business
For the desktop, Intel began shipments of the Pentium® 4 processor Extreme Edition at 3.2 GHz which brings Hyper-Threading Technology and an additional 2 Mbytes of cache memory to demanding PC gamers and computing enthusiasts. During the fourth quarter, Intel also began shipping the company’s first 90-nm microprocessor, code-named Prescott, which is being ramped in high volume.

In mobile, the company introduced the Celeron® M processor, the first value processor based on the company’s Banias microarchitecture for mobile computing. Intel also introduced the Mobile Celeron processor at 2.50 GHz along with a 2.8-GHz Celeron processor for use in mobile and desktop systems. Intel now expects the company’s first 90-nm mobile microprocessor, code-named Dothan, to be shipped during the second quarter, later than originally planned due to circuit modifications that needed to be made prior to the volume manufacturing ramp.

For the digital home, Intel announced development of the Entertainment PC, a slim, remote-control-based device that connects to consumer TV systems. Entertainment PCs are expected to be available from PC manufacturers in mid-2004 for below $US800, giving consumers the ability to store and wirelessly share digital music, photos, videos and 3-D games in the home. The company also announced the $US200-million Intel® Digital Home Fund, which will invest in companies developing hardware and software technologies for driving the convergence of PC and consumer electronics applications. Intel demonstrated a new Liquid Crystal On Silicon technology designed to enable HDTV displays with higher image quality and lower cost than current displays.

In enterprise computing, a number of customers around the world adopted Itanium® 2-based servers, including CompUSA, Fiat Group, First Trust Corporation, the ING Group, the Koehler Group of Germany and Korean telecommunications provider KT. The Itanium 2 processor extended its performance leadership by achieving the industry’s first TPC-C
benchmark result exceeding 1 million transactions per minute. In high-performance computing, the number of Intel processor-based systems in the TOP500* list grew by nearly 50 percent over a six month period, with supercomputers based on Intel processors outnumbering those based on RISC processors for the first time.

Intel Communications Group
In wireless, the company introduced a dual-mode 802.11a/b wireless network connection for notebook PCs based on Intel Centrino mobile technology. The new product adds a higher Wi-
Fi speed offering within the Intel Centrino mobile technology product line, which previously
included only 802.11b capability. Intel also began shipments of a new 802.11b/g connection to appear in systems based on Intel Centrino mobile technology during the first quarter of 2004.
Intel announced plans to combine its communications-related businesses into a single organisation called the Intel Communications Group. The new organisation will assume the product portfolio of the former Wireless Communications and Computing Group, including flash memories, processors based on Intel XScale technology, and chipsets and signal processing activities related to the Intel® Personal Internet Client Architecture (Intel® PCA).

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.com/pressroom.

Intel, Intel Centrino, Pentium, Celeron, Itanium, Intel StrataFlash, Intel XScale, Intel Personal Internet Client Architecture and Intel PCA are trademarks or registered trademarks 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.


ENDS

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