Intel, the world's largest maker of microchips, on Friday boosted its quarterly forecast because of stronger demand from computer makers, igniting its stock and fueling a broad market rally.
In a surprise statement, Intel, which employs just over 3,000 people at its Irish operations in Leixlip, Co Kildare, said it now expected revenue to come in the range of $7.3 billion to $7.8 billion, compared to an earlier target range of $6.9 billion to $7.5 billion.
Chip makers are showing signs of emerging from a three-year slump, its worst ever on record, and the Intel forecast was likely to boost expectations for a quicker recovery.
Intel now expects gross profit margin to be 56 per cent, plus or minus a couple of percentage points, higher than its earlier goal of around 54 per cent. Margins at chip makers tend to rise as chip factories become busier.
In hectic morning trading on Wall St, shares of the chip industry's bellwether surged to their highest price since June 2002, just before the stock collapsed following a profit warning from the chip maker.
The stock was at $28.93, up 9.5 per cent from Thursday's close.
Intel, however, noted that demand for communications products remains soft. The company, which has not issued a third-quarter profit forecast, said the remainder of its expectations for the period remain unchanged.