Leading chipmaker Intel has announced revenue of $9.7 billion in the first quarter, up 9 percent from $8.9 billion a year ago, and a very optimistic outlook for 2008. It appears that despite the disastrous financial environment, Intel has managed to thrive on strong demand for its processors and high-end servers.

Also, Intel's net income of $1.4 billion, or 25 cents a share, topped most Wall Street expectations, even though it actually fell from $1.6 billion, or 28 cents a share, the previous year.

"The first quarter marked a very good start to 2008," said Paul S. Otellini, Intel’s chief executive, in a conference call with analysts Tuesday.

The announcements have pushed Intel shares up, which fell in January after the chipmaker announced a bleak forecast for its first quarter. Fortunately, Intel proved itself wrong and now expects gross profit margins of 56 percent in the second quarter, with 57 percent for the full year.

"What we're seeing is growing strength in the core business," in the second quarter and through the rest of the year, Intel Chief Financial Officer Stacy Smith said in a conference call.

Intel actually started off making memory chips. Its success with the first microprocessors have determined then-CEO Andy Grove to shift the company's focus to microprocessors in the 1980s, a market which is considerably more stable. The decision was soon proven very clever and the company has since grown to rule undisputably the CPU market.

"Let me remind you, 75 percent of our revenues are not in the U.S.," said Otellini. "We don't really see this impacting our business at this time."

Recently, nVIDIA CEO and co-founder Jen-Hsun Huang went on an Intel-related rant at a meeting with financial analysts. At the Intel Developer Forum in Shanghai, Intel representatives boldly stated that discrete graphics cards will eventually become "unnecessary" for the regular consumer in the future.

"Claim after claim after claim. They're just false. They cross the line of fair play," Huang said. "Here's another one. nVIDIA's gonna be dead. Because we're (Intel) sticking the graphics in the CPU and (nVIDIA) will have no place to stick it," nVIDIA's CEO said.