Intel Corp. slid in late trading after giving a dire forecast for the current period, hurt by sinking demand from PC customers and tough competition in the lucrative market for server hardware. 

First-quarter sales will be $10.5 billion to $11.5 billion, the chipmaker said in a statement Thursday. That compares with an average analyst estimate of $14 billion. Intel expects to lose 15 cents in the quarter, excluding some items. Analysts had projected a profit of 25 cents.

The outlook reflects the myriad challenges facing Intel, which was attempting to stage a comeback even before the market for personal-computer chips — its main source of revenue — fell into a slump. To get back on track, the company needs computer makers to quickly work through inventory stockpiles and return to ordering components. That would provide Intel with a revenue boost needed to help shore up its finances, which were already stretched by ambitious plans to regain technological leadership within the chip industry. 

Eoin Treacy's view

The road to global competitive leadership is long and filled with obstacles. Above all catching up with Taiwan Semiconductor will be expensive and, even then, may not be possible. Both Intel and IBM failed to satisfy expectations for future earnings this week.

Intel has been attempting to build support but today’s earnings announcement is not going to inspire confidence.

IBM failed to sustain the breakout to new recover highs in December and posted a large downside weekly key reversal in the process. A retest of $120, which is the lower side of the two-year range, is a distinct possibility this year.

Meanwhile the Philadelphia Semiconductors Index has rallied to break  more than yearlong downtrend. In a time uncertainty such as this betting on leaders over potential catch up potential usually pays off.