Intel shares fall again to three-year lows Investors say growth propects are dim E-mail | Print | | Disable live quotes By John Shinal, MarketWatch Last Update: 5:36 PM ET Jun 7, 2006
SAN FRANCISCO (MarketWatch) - Intel Corp. shares fell 2.3% Wednesday, scraping three-year lows, as investors said the chip giant's plan to spin off its communications-related businesses won't change its heavy reliance on personal computer sales and other mature markets that are slowing. Intel (INTC : Intel Corporation News , chart, profile, more Last: 17.39-0.40-2.25%
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: INTC17.39, -0.40, -2.2%) fell for the third staight day to touch a low of $17.33, a price not seen on Intel shares since April 2003. The drop comes as the company is in talks with private investors and other chip firms to sell Intel's communication-chip assets. See full story on Intel talks. Shares of the world's largest chipmaker have fallen about 30% this year as more investors grow skeptical the Santa Clara, Calif.-based firm can jump-start sales growth. Intel has lost market share to smaller rival Advanced Micro Devices Inc. (AMD : Advanced Micro Devices, Inc. News , chart, profile, more Last: 28.00-0.95-3.28%
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: AMD28.00, -0.95, -3.3%) in the market for chips that run corporate servers. Its intention to exit the communications-chip markets, absent any other new initiatives, leaves it at the mercy of the mature market for PC chips, according to investors. "We don't own Intel," said Richard Hunter, director of research for Lighthouse Capital Management, a Houston investment firm that manages $400 million. "Intel is a really big company and it's hard to get good growth, especially when they're chained at the hip to personal computers," Hunter said. Intel Chief Executive Paul Otellini in April ordered a sweeping review of operations to "restructure and resize" the Santa Clara, Calif.-based company in response to a changed marketplace. The sales of the communications-chip assets, either in one sale or a series of transactions, is part of that plan. The company also plans to roll out new products later this year for laptops, desktops and servers that it hopes will take back market share it lost to AMD. Still, the markets for PC and server chips, which Intel still dominates, are growing slower than the various markets for chips used in cell phones, networking equipment and other communications-related equipment. "Where is Intel going to find growth?" asked Romeo Dator, co-manager of the U.S. Global Investors All-American Fund, which has $22 million in assets. The fund owns no shares of Intel and has been avoiding chip stocks in general, Dator said. "Chips have been a bad place to be lately," he said. John Shinal is the technology editor of MarketWatch in San Francisco.