Computer chip manufacturer Intel sees profits plummet.

The waning customer demand for computers saw the Intel Corporation’s profits fall by 90% in the last three months of 2008.

Intel’s fourth quarter results show that profits fell from $2.3 billion (£1.54bn) to $234 million (£157m).

The global chip manufacturer suffered a slump in sales of 23% to $8.2bn (£5.5m), in line with the revenue forecast of $7bn (£4.7bn) made earlier this month.

Intel blames the huge fall in profits on the previously announced reduction in the carrying value of the company’s Clearwire investments as well as the weakening consumer market and inventory contraction.

The California-based company is the latest in a list of computer firms, including Dell and Google, to be hit by the global economic crisis.

Paul Otellini, Intel president and CEO, said: “The economy and the industry are in the process of resetting to a new baseline from which growth will resume.”

Despite the sharp profit drop, Otellini remains optimistic: “Intel has weathered difficult times in the past, and we know what needs to be done to drive our success moving forward.”

Despite the fall in profits, Intel shares rose by 2.1%.

Intel has faced strong competition from the popularity of netbook computers, which use lower profit margin processor chips.