Intel Corp

Intel Corp. plans to spend $7 billion upgrading its U.S. factories over the next two years, a sign that the recession hasn't extinguished chip makers' thirst for cutting-edge equipment. The company's investment, announced Tuesday by Intel Chief Executive Paul S. Otellini in a speech in Washington, speaks to the semiconductor industry's need to keep investing heavily regardless of the poor economic climate that has led Intel to cut jobs.

Semiconductor giant Intel Corp.'s first-quarter sales and profit tumbled, but the technology bellwether said Tuesday that the personal-computer market it dominates was finally stabilizing from a free fall that began last year as consumers zipped up their wallets and made do with the hardware they had. Although the chip maker's earnings fell 55% and revenue dropped 26%, both beat Wall Street's estimates.

Intel Corp. may report a loss in the first quarter, breaking a more than 21-year run of profitability, Chief Executive Paul Otellini told employees. "We are not going to wake up in six months with everything rosy again," Otellini wrote last week in an internal memo obtained by Bloomberg News. After 87 quarters of profit, the first quarter is "too close to call," the memo said. Slumping demand for personal computers has forced Intel to run its factories below capacity, making them less profitable.

Intel Corp. shares fell after Friedman, Billings, Ramsey & Co. reduced profit and share-price estimates for the world's largest chip maker because of weakening personal-computer demand. PC shipments will decline 5% in the fourth quarter from the third, worse than Friedman's previous estimate of 3% growth, analyst Craig Berger wrote in a note to clients. He cut his 2009 earnings estimate by 17% to $1.10 a share and his share-price projection by 14% to $19. Intel stock slid 42 cents, or 2.9%, to $13.93.

Intel Corp., the world's largest semiconductor maker, won a judge's ruling that narrowed an antitrust lawsuit brought by computer buyers to cover only claims tied to U.S. sales. More than 70 consumers claimed in a consolidated lawsuit started in 2005 that they bought computers with Intel processors at inflated prices because the Santa Clara, Calif.-based company coerced manufacturers to buy its chips instead of cheaper alternatives.

The nonprofit that aims to seed the developing world with inexpensive laptop computers for schoolchildren has made peace with Intel Corp., the project's most powerful rival. The One Laptop Per Child program and Intel said Friday that the chip maker would join the board of the nonprofit and contribute funding.

Intel Corp., as expected, will win a Vietnamese government license to build a $605-million chip and computer-parts factory. Intel applied in early January to build the plant in Ho Chi Minh City. The investment license for Santa Clara, Calif.-based Intel was approved by the Ministry of Planning and Investment this week, Vietnamese officials said.

In another sign of Intel Corp.'s eroding market share, the world's largest chip maker warned Friday that it would miss quarterly sales targets as demand slips and archrival Advanced Micro Devices Inc. grabs customers. It was the latest indication of vulnerability from Intel, which supplies 80% of the microprocessors that run computers. In recent quarters, the Santa Clara, Calif.-based company has grappled with component shortages, canceled products and gains by AMD.

Trying to increase demand for personal computers in India and other emerging markets, Intel Corp. plans to invest $1 billion over the next five years to promote the use of computers in schools, cafes and other public spots in developing countries.

Intel Corp. asked a U.S. judge to limit an antitrust lawsuit by Advanced Micro Devices Inc. to claims about U.S. sales. Advanced Micro is seeking damages based mostly on the sales of its German-made microprocessors in foreign countries where U.S. courts have no jurisdiction, Intel said in a brief filed in Wilmington, Del. Advanced Micro, based in Sunnyvale, Calif.