Intel Corp has warned that third-quarter revenue could fall short of its own estimates by more than $1 billion on weaker-than-expected demand for personal computers.

The company, which dominates the market for PC microprocessors, said it expects third-quarter revenue to be $10.8 billion to $11.2 billion. That compares with its previous forecast of $11.2 billion to $12.0 billion, and analysts' average expectations of $11.5 billion, according to Thomson Reuters.

Intel shares were little changed in active morning trading at $18.14 on Nasdaq, after they rebounded from an earlier decline in which the stock had dropped to its lowest level since July 2009.

"I think people were relieved it was not worse," said Avian securities analyst Dunham Winoto."

Intel now sees gross margins in the period of 65 per cent to 67 per cent. It had previously forecast gross margins of 67 per cent plus or minus a couple of points.

Separately, Intel and Infineon are likely to announce this weekend a deal that involves the sale of at least part of the German chipmaker's wireless business, people familiar with the matter told Reuters. – Reuters