Things are looking better in chips. Intel on Thursday raised the range of its revenue expectations for the fourth quarter, a move that will is likely to buoy optimism among investors. The company said it now expects revenue for the fourth quarter to come in between $6.7bn and $6.9bn, higher than the previous range of $6.2bn to $6.8bn. In anticipation, some analysts inched up expectations in recent days. "Demand for Intel microprocessors has been better than expected, trending in line with normal seasonal patterns," the company said in a statement. "Intel's communications businesses have been tracking to the company's overall expectations at the beginning of the quarter." Last quarter, the company reported $6.6bn in sales and $655m in net income. Rival AMD, meanwhile, said microprocessor sales are better than earlier forecasts. The company will ship a record number of microprocessors this quarter, besting the mark of 7.8 million shipped last quarter, and achieve more than $661m in processor revenue, the record set in the first quarter. In all, total revenue will likely be 10 percent or more greater than the $766m in revenue from the third quarter, AMD said. The uptick comes amid speculation that demand is picking up, or at least that the worst of the decline may be in the past. In August 2000, chipmakers and PC manufacturers admitted that sales were not hitting expectations. Declines in sales and prices followed. Intel, among other companies, had to lower expectations on more than one occasion. Signs of stabilisation began to appear in November, with chip dealers and other reporting that some Intel and AMD chips were becoming more scarce, a sign of declining inventories. Memory prices also began to rise. "On the logic (processor manufacturing) side, our factories are approaching full," said Andy Bryant, Intel's chief financial officer, on a confrence call. "The transition to the Pentium 4 is happening quicker than we thought it would." Many, however, caution against seeing a full-blown turnaround in the uptick as yet. Some forecasts were overly pessimistic and became even more dour after the World Trade Center attack. Demand is also being fuelled by price cuts and special offers, which are eviscerating profits. Bryant, for instance, said the sales increase fits the usual seasonal sales pattern, a good sign, but nothing extraordinarily unusual. "Coupled with a highly promotional environment and lowered expectations," wrote Ashok Kumar, an analyst at US Bancorp Piper Jaffray in a note on 4 December, "most of the participants in the PC food chain are expected to post results at or above the high end of guidance. So December quarter results have little bearing on demand in the March quarter and beyond." "Incidentally," he added, "we expect the March quarter to be front-end loaded due to the launch of DDR systems in January and the Chinese New Year in February." See Chips Central for the latest headlines on processors and semiconductors. To find out more about the computers and hardware that these chips are being used in, see ZDNet's Hardware News Section. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Chips Central forum Let the Chips Central editor know what you think by email. And read other letters.