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Intel Cuts Revenue Forecast on Chipset Flaw
CNBC.com | January 31, 2011 | 11:09 AM EST

Intel cut its current quarter revenue forecast Monday due to a design error in a recently released chipset.

The error affects its Intel 6 series chipset, the company said, and it is prompting it to hold all shipments. The design error will reduce revenue by about $300 million.

Intel will begin delivering an updated version of the chip to customers in late February.

The company will also take a current quarter charge, though it did not specify by how much.

Revenue growth for the full year on a percentage basis is now expected to be in the mid-to-high teens, compared with the company's prior forecast of about 10 percent.

Recent acquisitions are expected to push overall revenue higher. Intel says it now expects total revenue of $11.7 billion, plus or minus $400 million.

Its prior outlook was for $11.5 billion, plus or minus $400 million.

Analysts said the financial impact of the design error would be muted, but added that the issue would ding the company's reputation, at least temporarily.

"This is a minor negative and not as big an issue as it seems," said Miller Tabak analyst Brendan Furlong. "It's obviously an embarrassment, rather than a major problem for the company."

Shares of Intel , which were briefly halted in morning trade, resumed trading about 2 percent lower.

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