The semiconductor industry is in its worst-ever downturn

Revenue could be up to 2.7% lower than the previous year, the firm admitted in its latest update to the stock markets.

"We haven't seen anything yet that we would call a corporate recovery," the firm's financial officer Andy Bryant said.

Intel said sales of computer microprocessors were slightly higher than expected but that weak sales of chips for mobile phones and other electronic devices dragged the overall outlook lower.

Just three weeks ago, Intel chief executive Craig Barrett told a forum that technology firms had several reasons to expect business to improve over the next 12 months.

Barometer

The California-based company is seen as a barometer for the chip industry which is struggling to recover from its worst ever downturn.

The chip market, in turn, is often seen as a signal of any recovery in the wider technology market.

The global semiconductor market is forecast to grow by 9% this year with total sales of $167bn, according to Gartner.

Intel has long been predicting a rush of spending by firms updating computer systems, but the hoped-for corporate spending is being slow to emerge.