"2005 was our third consecutive year of double-digit revenue and earnings growth, leading to the best operating results in the company's history," said Otellini.

Intel CFO Andy Bryant was reserved but still up-beat that the new longer forecasting of company performance would have Intel grow between 6 and 9 percent in sales for 2006.

However, digging a little deeper it would seem that Bryant is projecting growth levels below those achieved over the last three years. In fact Bryant is projecting that Intel will simple keep pace with the overall semiconductor growth rate projections of a group of market analysts. That's not very inspiring for a whole host of reasons!

With revenues coming in at $38.8 billion US dollars for 2005, Bryant is only projecting a rise in revenues of $2 billion and $3 billion in 2006. That's equivalent to just one 300mm fab, yet Intel is ramping several in 06.

Intel has been losing market share to AMD in the high ASP arena but this doesn't explain the poor projections for 06.

The lack of compelling new products has had an effect on sales, with company claiming that all regions were flat in demand sense and PC sales would remain poor due to lower world GDP projections for the year.

I don't yet buy into that assessment at all. Though GDP figures are not great, they show good growth, consistent with last years figures and overall improving conditions. PC demand may be down, but again is that because there is not the compelling product that makes consumers spend hard earned money. (Thing iPod for example)

With new dual core microprocessors expected in the second half of the year, we might see Intel's projections improve as PC's start getting something the consumer wants, but if there are delays in shipping as seen before then Intel will continue to struggle.

Is there any good news?

Yes there is and it's nice to report that capital spending will increase in 2006. Not surprisingly the doom merchant market analysts got it wrong as Intel expects to spend around $6.9 billion US dollars, which is a 19 percent increase over 2005. R&D spending will also increase, reaching $6.5 billion, up 27 percent from 05.

Although the spending spree is good news for the equipment suppliers there is concern that such figures show that things are not right in Intel-land right now. These expenditures mean Intel is being forced to spend more than it will earn in 2006 just to get back on track. Financial analysts have already noted that this is a deviation from Intel's claims to keep the two in proper balance so that profit margins remain acceptable.