Business and Capital Market Analysis !!!

NEW YORK SAN FRANCISCO, Oct 31 (Reuters) - Intel Corp warned on Friday the credit crisis could hurt demand for its chips, and lead to the insolvency of key suppliers which could result in product delays.

The news initially drove its shares down 3 percent, but the stock recovered as Wall Street appeared to dismiss the comments as standard risk warnings in Intel's 10-Q quarterly report filed with the U.S. Securities and Exchange Commission.

The world's largest chip maker, which makes 80 percent of microprocessors that power personal computers, gave no new financial forecasts. It will issue a mid-quarter update on Dec.4, its first mid-quarter update in three years, a spokesman said.

"Current uncertainty in global economic conditions poses a risk to the overall economy as consumers and businesses may defer purchases in response to tighter credit and negative financial news, which could negatively affect product demand and other related matters," Intel said in the third-quarter filing.

"Intel has $12 billion on the balance sheet so there's quite a bit of room for them to step in and make sure the supply chain is not disrupted."

Intel spokesman Chuck Mulloy said the filing is consistent with the "dynamic" environment in which the company is operating."Business fundamentals are good for Intel. However, the macro-economic climate is something we don't have as much visibility into."

Other risks cited by Intel in its 10-Q include the inability of customers to obtain credit to finance purchases of Intel products, as well as the company possibly facing its own difficulties in obtaining short-term financing from the issuance of commercial paper.

The company had forecast fourth-quarter revenue between $10.1 billion and $10.9 billion, which it said was weaker than typically seen in the period running up to the year-end holiday season.

but with the current macroeconomic environment, it is hard to discern what demand will be for the fourth quarter of 2008. Shares of Intel fell as low as $15.62 before recovering to trade up 16 cents at $16.33 on the Nasdaq. Shares of smaller rival Advanced Micro Devices Inc were up 11 cents at $3.67 on the New York Stock Exchange. (forexfactory)