Intel is investing in new technologies to cut production costs

Fourth-quarter revenue will now be between $10.4bn (�5.9bn) and $10.6bn.

Analysts had expected sales of nearly $10.6bn, and the firm had earlier said they could rise as high as $10.8bn.

Intel's shares fell on the news as many investors had hoped the chipmaker would follow rival Texas Instruments, which raised its earnings outlook this week.

Intel shares lost 3% in electronic after-hours trading in New York.

"It's going to be viewed as moderately disappointing," said Cody Acree, an analyst at Stifel, Nicolaus & Co. "Optimism had definitely become more prevalent with general semiconductor demand overall."

Price slice

The company also tweaked its forecasts for gross profit margins, prompting analysts to question whether or not they had peaked.

"There's a lot of cynicism about their growth prospects," said Roger Kay of research firm Endpoint Technology Associates. "It's a really big boat and can't turn very quickly."

Intel has been hampered by supply problems, though chief financial officer Andy Bryant has said the company was in the process of sorting that issue out. The company said its business was still strong, with growth driven by demand for laptop computers and rising sales in emerging markets.

Mr Bryant said Intel also was looking to cut costs by improving manufacturing techniques.