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IDF: Intel sees recovery ahead

Chip maker tells analysts that there are signs that the slump could be coming to an end
Written by Graeme Wearden, Contributor

Semiconductor maker Intel struck a positive note on Monday when a top executive claimed that the chip industry was close to recovery.

Speaking at the Intel Developer Forum, company vice president and general manager Louis Burns told analysts that chip sales could soon be rising, after several months of gloom. "Demand for Intel's products is showing signs of returning to more normal levels," Burns told attendees.

Burns also claimed that the imminent release of Microsoft's XP operating system would encourage users to buy one of Pentium 4 processors. However, analysts have told ZDNet News that there's unlikely to be a rush of P4 orders.

Talk of an imminent upturn could reassure many UK high-tech workers. Chip sales are a barometer for the condition of the wider IT sector, and a drop in demand for PCs and mobile phones has hit many semiconductor makers hard, as manufacturers respond by cutting back on chip orders. This has resulted in the closure of factories in Britain, such as Motorola's Bathgate plant -- while Gateway's factory in Ireland is expected to shut soon after the company completes a compulsory consultation process with workforce representatives.

There are fears that if the tech slump doesn't end soon, other factories could be in trouble. If Intel is right, then a recovery in the chip sector -- on the back of an increase in sales of high-tech equipment -- could limit future job losses in the UK's IT sector.

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