Intel not considering IPO for chip business

KULIM, Malaysia  - The world's top computer chip maker, Intel Corp, said

on Thursday it was not considering an initial public offering for its memory

chip business.

"We are not currently thinking about those kind of things," Chief

Executive Paul Otellini said, when asked about speculation that Intel may list

its memory chip business.

"What we are thinking about is simply allowing the memory factory team

to work much more tightly aligned with the design team," he told reporters

in the northern Malaysian state of Kedah.

Otellini was in Malaysia to open a $40-million design and development centre

whose staff of 900 people will design microprocessors, chipsets and other

components for use in Intel products worldwide.

Thursday marked Intel's 10th anniversary in Malaysia, where its investments

amount to $3 billion, and it expects to have 10,500 employees after the design

centre is fully staffed.

Intel, which has lost market share across the board to rival Advanced Micro

Devices Inc., has said it expected revenue in 2006 to fall about 3 percent from

last year, to $37.7 billion. As a result, the company would scale back its

planned direct spending by about 8 per cent, similar to last year's $11 billion.

Intel also cut its estimate of 2006 gross margin, a measure of profitability,

to 53 percent from its earlier forecast of 57 per cent.