INTEL POSTS RECORD SECOND-QUARTER REVENUE OF $9.5 BILLION

Press release

Revenue up 9 Percent Year-over-Year
Operating Income up 67 Percent Year-over-Year
Net Income $1.6 Billion; EPS 28 Cents

SANTA CLARA, Calif., July 15, 2008 – Intel Corporation today announced record second-quarter revenue of $9.5 billion, operating income of $2.3 billion, net income of $1.6 billion and earnings per share (EPS) of 28 cents.

“Intel had another strong quarter with revenue at the high end of expectations and earnings up substantially year over year,” said Paul Otellini, Intel president and CEO. “As we enter the second half, demand remains strong for our microprocessor and chipset products in all segments and all parts of the globe.”

	Q2 2008	vs. Q2 2007	vs. Q1 2008
Revenue	$9.5 billion	+9%	-2%
Operating Income	$2.3 billion	+67%	+9%
Net Income	$1.6 billion	+25%	+11%
EPS	28 cents	+27%	+12%
Results for the quarter included significantly lower NOR flash memory revenue along with restructuring and asset impairment charges of $96 million. Results for the first quarter of 2008 included the effects of restructuring and asset impairment charges that lowered EPS by 4 cents. Results for last year’s second quarter included tax items that increased EPS by approximately 3 cents along with restructuring charges of $82 million.

Financial and Key Product Information

· Mobile microprocessor and chipset units both set records.

· Total microprocessor units were up sequentially and higher than seasonal.

· Gross margin of 55.4 percent was up from 53.8 percent in the first quarter and slightly below the midpoint of the previous expectation as growth in demand for lower-priced notebook PCs resulted in a lower than expected microprocessor average selling price.

· Restructuring and asset impairment charges of $96 million were lower than the previous expectation of approximately $250 million.

· The effective tax rate for the quarter was 31 percent, lower than the previous expectation of approximately 33 percent due to a tax settlement.

· The company used $2.5 billion to repurchase 109 million shares of its common stock.

Business Outlook

Intel’s Business Outlook does not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after July 14.

Q3 2008:

· Revenue: Between $10.0 billion and $10.6 billion.

· Gross margin: 58 percent plus or minus a couple of points.

· Spending (R&D plus MG&A): Approximately $2.9 billion.

· Restructuring and asset impairment charges: Approximately $60 million.

· Net gains or losses from equity investments and interest and other: Loss of approximately $30 million.

· Tax rate: Approximately 33 percent.

· Depreciation: Approximately $1.1 billion.

Full-Year 2008:

· Gross margin: 57 percent plus or minus a couple of points, unchanged.

· R&D: Approximately $6 billion, unchanged.

· MG&A: Approximately $5.7 billion, versus the previous expectation of $5.5 billion.