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Strength in PCs leads Intel to raise Q3 revenue guidance

Strength in PCs leads Intel to raise Q3 revenue guidance

Intel says PC makers are renewing inventory, which is helping boost chip shipments

The PC market is showing signs of recovery, with Intel increasing its revenue guidance based on improved chip shipments.

The chip maker has raised its revenue guidance for the third quarter to $15.6 billion, plus or minus $300 million, an improvement from $14.9 million, plus or minus $500 million.

That's due to PC makers replenishing laptop and desktop inventory, which means Intel is shipping out more chips. It's likely in anticipation of the holiday season, when PC shipments rocket.

"The company is also seeing some signs of improving PC demand," Intel said in a statement.

In the second quarter of the year, PC makers slowed down chip orders and were clearing out existing stock of laptops and desktops. PC shipments declined by 4.5 percent during that period, according to IDC.

Shipments of gaming PCs, 2-in-1s and Chromebooks are driving PC shipments. Microsoft's free upgrade offer to Windows 10 has also ended, which means users are more likely to buy new PCs to get Windows 10.

Meanwhile, new laptops with Intel's Kaby Lake chips are now available. All the top PC makers have announced new 2-in-1s and laptops with Intel's new chips. New Kaby Lake chips for gaming PCs will be announced in January.

Intel also has started shipping Pentium and Celeron chips, both aimed at low-cost laptops, based on the same architecture and code-named Apollo Lake. Many Chromebooks are based on Apollo Lake chips.

Intel will announce third-quarter earnings on October 18.

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