"We expect the weaker demand environment to persist into at least 1H09," Pitzer wrote, referring to the first half of next year.

As a result, Pitzer lowered his 2009 revenue forecast for Intel to US$33.8 billion, a decline of 12 percent compared to his 2008 forecast. He also said Intel's gross margin could fall to 50 percent during the first quarter of 2009 due to lower revenue, the cost of carrying excess production capacity, inventory write-offs, and startup costs for Intel's upcoming 32-nanometer process technology.