Intel reported better than expected quarterly results last night as growth in its data centres and Internet-of-Things businesses helped offset weak demand for personal computers that use the company's chips.
The world's largest chipmaker cut its full-year capital expenditure forecast for the second time.
The company has been expanding its line-up of higher-margin chips used in data centres to counter slowing demand from the PC industry and agreed to buy Altera for $16.7 billion in April as part of these efforts.
Revenue from the data centre business, Intel's second-largest, grew 9.7% to $3.85 billion in the second quarter from a year earlier, helped by continued adoption of cloud services and demand for data analytics.
"We continue to forecast robust growth rates of the data center group, Internet of Things group and NAND businesses, which we expect to mostly offset the PC decline," the company's chief financial officer Stacy Smith said.
Revenue from the PC business, Intel's largest, fell 13.5% to $7.54 billion in the quarter ended June 27.
"Our expectations are that the PC market is going to be weaker than previously expected," Smith said.
Research firm Gartner forecast global PC shipments to fall 4.5% to 300 million units in 2015, with no respite until at least 2016.