The folding demand for microprocessors, because of the panting sales of PCs, has brought down the fourth-quarter earnings of Intel Corp. by a monstrous 90% as against the figures a year back. It is for the first time in 20 years, the fourth-quarter earnings were lower than third quarter.

The net income of the chipmaker - which was $2.3 billion, or 38 cents per share, a year ago - has fallen to $234 million, or 4 cents per share, this time around. The fourth-quarter sales contracted 23% - from $10.7 billion to $8.2 billion.

The fall in earnings and sales are along the lines of the Wall Street's subdued predictions and Intel's earlier guidance respectively.

Along with a freeze in spending on information-technology, the other big reason for the constriction in Intel's profits is the swing towards low-margin processors for a category of small laptops called "netbooks." Yet another reason for the severity of the drop was a $1 billion writedown of the value of Intel's investment in Internet provider Clearwire Corp.

According to Betsy Van Hees, an analyst for Caris & Company, "The PC industry is having a hard time right now. We're in a global recession and we don't have a lot of demand-drivers to pull us out."

Despite it all, Intel maintains that it is in a reasonably good position for growth when the economy picks up. Intel Chief Executive Paul Otellini said: "We remain optimistic about where our strategy and execution can take us."