Chipmaker Intel last night forecast revenue broadly in line with Wall Street's expectations and signalled a hefty cut in capital expenditures this year, lifting its shares in after-hours trading. 

The company is the world's largest semiconductor maker and employs about 4,500 in Ireland, including contractors. 

It managed to reach the drastically lower revenue forecast it offered for itself last month, and investors breathed a sigh of relief that the company, which is struggling with shrinking demand for personal computers, did not have any more bad news.

Intel last night forecast current-quarter revenue of $13.2 billion, plus or minus $500m.

This is based on expectations of stronger demand for its personal computer chips and continued strength in its data centre business.

Analysts were expecting $13.51 billion, according to Thomson Reuters I/B/E/S. 

For the full year, Intel forecast flat revenue, also in line with Wall Street's estimates. 

Intel said it would cut 2015 capital expenditures to $8.7 billion from $10 billion, a reduction that analysts said should improve free cash flow. 

Intel reported revenue of $12.8 billion for the first quarter, ended March 28, flat with a year ago and slightly below analysts' average estimate of $12.9 billion.

The chipmaker had cut its first-quarter revenue forecast by nearly $1 billion to $12.8 billion in March, citing weak demand for PCs that use the company's chips.

It posted net income of $1.99 billion, or 41 cents per share, up from $1.93 billion, or 38 cents per share, a year earlier. Analysts had expected 41 cents. 

The company, which reported consolidated results for its PC and money-losing mobile businesses for the first time, had posted better than expected profits in the last four quarters. 

Intel has been lagging behind rivals such as Qualcomm and ARM Holdings - the British company behind the processor in Apple's iPhone 6 - in the fast-growing smartphone market.