Exhibit 99.1

SANTA CLARA, Calif., July 16, 2002 -- Intel Corporation today announced second-quarter revenue of $6.3 billion, down 7 percent sequentially and approximately flat year-over-year.

     Second-quarter net income was $446 million, down 52 percent sequentially and up 128 percent year-over-year. Earnings per share were $0.07, down 50 percent sequentially and up 133 percent from $0.03 in the second quarter of 2001. The results include a $106-million charge to cost of sales related to the decision to wind down Intel^{(Registered Trademark)} Online Services, along with a $112- million write-off of acquired intangibles, primarily related to Xircom PC cards for wireline networking. In accordance with generally accepted accounting principles (GAAP), the 2001 results reflect charges for the amortization of goodwill, which is no longer amortized in the current year with the adoption of FASB rule 142.

     Second-quarter net income excluding acquisition-related costs¹ was $620 million, down 39 percent sequentially and down 27 percent year-over-year. Earnings excluding acquisition-related costs were $0.09 per share, down 40 percent sequentially and down 25 percent from $0.12

in the second quarter of 2001. These results include the impact of the $106-million charge related to the online services business.     

     Acquisition-related costs during the quarter consisted of $14 million in one-time charges for purchased in-process research and development, and $229 million in amortization of acquisition-related intangibles, write-off of intangibles and other costs. Intel expects to continue to report earnings excluding acquisition-related costs through the end of the year to provide a consistent basis for financial comparisons.

     "In a tough environment, we continued to execute well," said Craig R. Barrett, Intel chief executive officer. "Our investments in technology and manufacturing are delivering processors with clear performance leadership, resulting in market segment share gains across the board. We also saw growth in our communications businesses, led by solid flash memory revenue and share growth.

     "Although an overall industry recovery has been slow to materialize, we still expect a modest seasonal increase in demand in the second half," Barrett continued. "In this environment, our strategy remains the same: Focus on execution, take prudent cost cutting measures, and invest to further improve our competitive position and long-term growth prospects."

Continuing uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters.

** Revenue in the third quarter is expected to be between $6.3 billion and $6.9 billion.

** Gross margin percentage in the third quarter is expected to be 51 percent, plus or minus a couple of points. The second-quarter gross margin percentage was 47 percent and would have been 48.7 percent without the $106-million charge related to the online services business. Intel's gross margin percentage varies primarily with revenue levels, product mix and pricing, changes in unit costs, capacity utilization, and timing of factory ramps and associated costs.

** Gross margin percentage for 2002 is expected to be 51 percent, plus or minus a few points, lower than the previous expectation of 53 percent, plus or minus a few points, primarily due to second-quarter revenue levels and charges.

** Expenses (R&D, excluding in-process R&D, plus MG&A) in the third quarter are expected to be approximately $2.1 billion. In the second half of 2002, the company expects to reduce its workforce by approximately 4,000 employees exclusive of acquisitions, primarily through attrition, voluntary separation programs and some targeted business disinvestments. Expenses, particularly certain marketing- and compensation-related expenses, vary depending on the level of revenue and profits.

** R&D spending for 2002, excluding in-process R&D, is expected to be approximately $4.0 billion, lower than the previous expectation of $4.1 billion.

** Capital spending for 2002 is expected to be between $5.0 billion and $5.2 billion, lower than the previous expectation of $5.5 billion, primarily due to non-fab-related spending reductions, with no change in the company's current and future microprocessor capacity plans.

** Gains or losses from equity investments and interest and other in the third quarter are expected to be a net loss of $25 million due to the expectation of a net loss on equity investments of approximately $75 million, primarily as a result of impairment charges. Gains or losses will vary depending on equity market levels and volatility, gains or losses realized on the sale or exchange of investments, determination of impairment charges, including potential impairment of non-marketable investments, interest rates, cash balances, mark-to-market of derivative instruments, and assuming no unanticipated items.

** The tax rate for 2002 is expected to be approximately 28.4 percent, excluding the impact of acquisition-related costs.

** Depreciation is expected to be approximately $1.2 billion in the third quarter and approximately $4.7 billion for the year.

** Amortization of acquisition-related intangibles and costs is expected to be approximately $100 million in the third quarter and approximately $530 million for the full year.

    Intel's corporate representatives will meet privately during the quarter with investors, investment analysts, the media and others, and may reiterate the Business Outlook. Intel intends to publish a Mid-Quarter Business Update on Sept. 5. From the close of business on Aug. 30

until publication of the Update, Intel will observe a "Quiet Period" during which the Outlook and the company's filings with the SEC on Forms 10-K and 10-Q should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to update by the company. For more information about the Outlook, Update and related Quiet Periods, please refer to the Outlook section of the Web site at www.intc.com.