One problem is PC demand. The market has seen unit growth for the past three years at percentages in “the low double digits,” said Mr. Otellini, but this year Intel is projecting slower percentage growth in the “high single digits,” which is less than some market-research firms expect.
But Intel faces another problem. When it last went through a period of soul-searching two decades ago, it was prompted by years of damage from Japanese competitors, which forced the company out of its original business in memory chips. This time, Intel is wrestling with only one competitor of significance: AMD, based just a few miles from Intel headquarters in Santa Clara, Calif.