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Intel: Cheap Memory Won't Erase Profits

New markets will protect company from NAND flash price drops

By Rob Quinn,  Newser Staff

Posted Mar 5, 2008 11:17 PM CST

(Newser) – Steep drops in the price of NAND flash memory have hit Intel's profits, but CEO Paul Otellini vows it's not going to put the company in the red, the AP reports. Prices of the chips have fallen more than 50% recently, much more than the chipmaking giant had predicted. Otellini says the company will move into new markets to offset the effect of the cheap chips.

Oversupply and competition has driven down the price of NAND flash chips, and Intel may slow down its investment in the category. "This business will not be a drag on Intel Corporation," Otellini promised. "We're going to fix it, or we're going to make sure it's profitable, one way or another." He said the company's core business was still doing fine.

A sign outside of Intel Corp. headquarters is seen in Santa Clara, California in this file photo. The chip-making company's CEO says plummeting prices for NAND flash will hit the company's profits, but won't drag its business down.   (AP Photo/Paul Sakuma)
A sign outside of Intel Corp. headquarters is seen in Santa Clara, California in this file photo. The chip-making company's CEO says plummeting prices for NAND flash will hit the company's profits, but...   (Associated Press)
Intel Corp. Chief Executive Paul Otellini shows off a wafer of new chips with billions of transistors with super-small 32-nanometer circuitry at the Intel Developers Forum in San Francisco. Otellini has said the company plans to aggressively move into new markets to offset losses caused by falling prices for NAND...
Intel Corp. Chief Executive Paul Otellini shows off a wafer of new chips with billions of transistors with super-small 32-nanometer circuitry at the Intel Developers Forum in San Francisco. Otellini has...   (Associated Press)
The Intel exhibit at the Consumer Electronics Show at the Las Vegas Convention Center is seen Wednesday, Jan. 9, 2008.   (AP Photo/Paul Sakuma)
The Intel exhibit at the Consumer Electronics Show at the Las Vegas Convention Center is seen Wednesday, Jan. 9, 2008. (AP Photo/Paul Sakuma)   (Associated Press)
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