Intel sets an upbeat tone with surge

Shares in technology companies got a boost yesterday after industry giant Intel posted better-than-expected revenue and margins for the fourth quarter.

The world's largest chip maker's net profit for the final three months of 2010 surged 48 per cent year-on-year to $3.4 billion (2.1bn), shrugging off concerns that the US company had failed to tap into the booming market for mobile devices such as smartphones and tablet-style computers.

Intel's gains were driven by strong corporate spending as companies that froze their technology budgets during the recession bought new servers for their data centres and PCs for their workers.

Server chips tend to carry higher profit margins than semi-conductors for PCs.

Intel's processors are the brains in 80 per cent of the world's PCs, but the company has yet to make its mark in mobile gadgets, a market dominated by Britain's Arm Holdings.

Intel is the first major technology company to report its fourth-quarter results and its upbeat numbers set a positive tone for the rest of the sector.

Shares of tech companies such as Dell and Microsoft moved up in after-hours trade in the United States.

In Britain, Arm benefited from Intel's success, topping the Footsie risers board with shares up 5.3 per cent to 530.5p.