Accounting the recession and its impacts on chip market, the chip giant Intel has cut its forecasts related to fourth quarter.

The recession is forcing a sharp slow in IT purchasing.

Intel has noticed a sharp decline in demand of products globally and indicated that companies involved in manufacturing PCs are reducing their component inventories.

Intel now expects its revenue for the quarter ending Nov. 28 to about US$9 billion, plus or minus $300 million, down from its earlier forecast of $10.1 billion to $10.9 billion.

Even the research firm IDC has also lowered its forecast for IT spending in 2009. IDC expects IT spending to grow by just 2.6 percent next year compared to 2008, down from its earlier forecast of 5.9 percent growth.

The forecasts indicate that spending on hardware and inventories will gradually decline. The industry will lose more than $300 billion in revenue over the next four years as a result of the slowdown.

Earlier while reporting its quarter earnings, Intel had warned of uncertainties in fourth quarter.

Tamanna Mehta/ITVoir Network