Intel Corporation (NASDAQ:INTC) revealed that the production of its next generation PC chip, Broadwell, will lag behind the schedule by a quarter. Brian Krzanich, CEO of Intel, informed that a technical glitch is the primary issue behind the delay.
Technical faults delay Broadwell
Broadwell chips are expected to be a step ahead compared to the Haswell line of the processors and are claimed to be more powerful and efficient.
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“We and our (manufacturing) partners have a strong desire to get Broadwell to the market,” Mr. Krzanich said. “This is a small blip in the schedule.”
Intel Corporation (NASDAQ:INTC)’s Broadwell chips will make the PC’s sleeker, lighter and faster compared to present laptops and the battery life will be enhanced. PC’s should have these features as consumers prefer buying a lighter, smaller and thinner tablet rather than going for PC’s.
Patrick Wang, an analyst at Evercore, said that delay in Broadwell production was not expected, however, Intel Corporation (NASDAQ:INTC) will get ample time to work through existing chip inventory already in the market.
Intel 3Q profits down
The news of delay came amid a decline in the third quarter profits due to sluggish PC sales. Intel Corporation (NASDAQ:INTC) posted better than expected third quarter earnings on Tuesday and the revenue earned was according to the expectations. The chipmaker gave cautious guidelines for the current period, believing that demand of PC in developed markets like Western Europe and North America “appeared to bottom out.”
For the third quarter, Intel posted net income of $2.95 billion (£1.86bn) for the three months ended September, compared to $2.97 billion in the same period last year. The PC chip making division witnessed a decline of 3.5 percent in sales. The PC market has been witnessing a downfall from six straight quarters and touched a five year low in the July-to-September period. Sales for Intel’s data center business posted an increase of 12 percent with record sales of $2.9 billion.
“The third quarter came in as expected, with modest growth in a tough environment,” said Mr. Krzanich said in a statement.
PC market slowing
Rising popularity of tablets and smartphones has been the key reason of declining popularity of PC’s, which in turn has affected chip makers.
According to research firms Gartner and IDC worldwide, PC shipments dropped around 8 percent year-over-year in the third quarter of 2013. Consumers are bagging tablets or smartphones with similar features to that of PC’s for lower prices.