Intel Pitches Plan to Beat Chip Glut

Intel hopes to stay profitable by producing new chip designs faster than its competitors, according to the company's president.

Facing a market glut of microprocessors and weak corporate demand for PCs running Microsoft Corp.'s new Windows Vista OS, Intel Corp. hopes to stay profitable by producing new chip designs faster than its competitors, Intel CEO Paul Otellini said Monday.

"There's clearly more capacity to build microprocessors than there is demand in 2007, and probably in 2008," Otellini told financial analysts at the Morgan Stanley Technology Conference in San Francisco.

To decrease the impact of a head-to-head processor pricing war with rival Advanced Micro Devices Inc. (AMD), Intel must return to the quick development habits it used when producing its Pentium family of chips, Otellini said. Intel backed off that pace after producing the Pentium 4, and soon began to lose market share when Advanced Micro Devices Inc. (AMD) launched the Opteron chip in 2003.view site