AmTech Sees Risks to Intel's (INTC) Margins in Future Quarters

October 15, 2008 1:04 PM EDT

American Technology Research is out with a research note reviewing Intel's (Nasdaq: INTC) Q3 earnings, which were released yesterday after the close. The firm maintains its Neutral rating and $19 price target.

Despite gross margins that beat the Street's estimates, AmTech believes "there is upcoming gross margin and revenue risk in future quarters" given:

• increasing Atom demand is fully met by the end of the year
  
• 32nm Fab investments likely start in 1H09 in any macro scenario
  
• inventories days rose 4% to 75
  
• mix shift to the low-end hollows out the mid-tier gross margin contribution

As Intel offered a wider range for its Q4 sales guidance, the firm believes Intel is "responding to elevated caution and a lack of visibility..."

Intel Corporation engages in making, marketing, and selling integrated circuits for computing and communications industries worldwide.

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