Intel CEO says Sandy Bridge on track for 2011

SAN FRANCISCO (Reuters) - INTEL (INTC.NQ)Corp's Sandy Bridge processor will begin shipping heavily from early 2011, marking introduction of the top chipmaker's next-generation chips and its latest assault on the specialized graphics market.

Chief Executive Paul Otellini told the Intel Developer Forum on Monday PC sales will again be driven by emerging markets such as China in 2011 after signs of weaker-than-expected demand for PCs in mature markets.

He offered no specific forecasts for Intel sales.

Shares in Intel and arch-rival Advanced Micro Devices leapt as investors piled back into a chip sector battered in past weeks. In August, Intel warned third-quarter revenue could fall short of its own estimates by more than $1 billion, reinforcing doubts about the strength of a technology sector recovery.

The company is now betting that Sandy Bridge, which it says combines more muscular graphics with its core processing power, will win over PC vendors and consumers next year.

"These second-generation Intel core processors will begin shipping in very high volume early in 2011," Otellini said.

Intel would like to see Sandy Bridge counted on to handle the mainstream graphics needs of computers built over the next few years, though PC manufacturers might continue to include specialized graphics cards in their products.

Some critics argue Intel's new chip will not satisfy high-end users, such as gamers willing to splash out hundreds of dollars separately for top-of-the-line graphics cards. That market is now dominated by Nvidia and AMD's ATI.

Shares in Intel were up 2.6 percent at $18.44. Analysts said investors were piling back into semiconductor counters on positive economic news from China and Europe.

(Reporting by Noel Randewich, additional reporting by Alex Dobuzinskis; Editing by Gunna Dickson, Phil Berlowitz)

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