Intel's sales are at record levels

Net income rose 5% to $2bn (�1.1bn) in the three months ending 1 October, from $1.91bn a year earlier. Sales during the period rose 18% to $9.96bn.

While profit was just below market forecasts, sales hit a record driven by sales of chips for notebook computers.

Intel expects sales of between $10.2bn and $10.8bn in the current quarter.

The company is still having problems filling demand, however, and while chief financial officer Andy Bryant was optimistic about its ability to meet orders some concerns have remained.

Tougher market

"You've got this supply issue and people want to see how they execute through the [current] quarter," said Apjit Walia, an analyst at RBC Capital Markets.

Shares of Intel lost more than 3% in after hours electronic trading in New York, signalling that the worries are unlikely to go away quickly.

Intel's financial position and status as the semiconductor bellwether may be in jeopardy Apjit Walia RBC Capital Markets Check Intel's share price

Intel is seeing good demand for its Centrino chips, which are used in laptop computers and let users connect to the internet and hardware, such as printers, without cables or wires.

Analysts warned that the company may see demand for its chips used in desktop, or stand alone, computers decline as consumers turn towards smaller and lighter products.

At the same time Intel is coming under increased pressure from rivals including Advanced Micro Devices.