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May 11, 2012, 01.46 AM IST | Source: Reuters

Intel CEO plays down concerns about tech spending

INTEL-OTELLINI:Intel CEO plays down concerns about tech spending

By Noel Randewich

SANTA CLARA, California (Reuters) - Intel Corp Chief Executive Paul Otellini said he is not seeing unexpected weakness in enterprise technology spending that Cisco CEO John Chambers cited when he forecast quarterly earnings below estimates.

"This quarter is playing out as we thought. The enterprise is good, it's not fantastic, so we don't see a change in that," Otellini said in answer to a question at Intel's annual investor day on Thursday.

Shares of Cisco Systems Inc , which relies on government and corporate spending on Internet gear, dropped more than 10 percent on Thursday following its earnings report a day earlier.

"I think John's comments were focused on Europe in particular. We haven't seen any change in Europe demand on the enterprise side," Otellini said.

Much of the presentations by Otellini and other Intel executives showcased the chipmaker's long-awaited push into smartphones and ultrathin laptops. Intel offered little new hope to investors concerned about languid PC sales.

Otellini also forecast that Intel, with its deep pockets, would survive as one of a handful of leading-edge chip manufacturers as the sector moves toward larger and costlier factories.

With the industry preparing to increase the size of the silicon wafers it uses, letting manufacturers fit more chips on each, future leading-edge factories will cost more than $10 billion each to build, compared with about $5 billion now, Otellini added.

With worldwide PC shipments barely growing, Intel has been racing to establish a foothold in smartphone and tablet markets, where processors based on ARM Holdings'

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