Intel Plans to Increase Capital Spending 20%

Intel Corp. will spend 20% more next year on tools and facilities for making chips, analysts estimate, suggesting that the world’s largest microchip maker has a rosy outlook for the industry overall.

Although Intel’s official forecast for 2005 capital spending is not scheduled to be made until January, analysts got an early look from a forecast made by Intel executives last week on the ratio of capital spending to cost of goods sold.

Based on average Wall Street estimates for revenue and gross margin, analysts calculated that Intel was budgeting for $4.5 billion to $5 billion in spending.