Included in the expectation for gross margin in the third quarter of 1998 are write-offs associated with facilities realignment to improve manufacturing efficiencies, and the previously announced headcount reduction program. Intel's gross margin expectation for the full year 1998 is 52 percent, plus or minus a few points. In the short-term, Intel's gross margin percentage varies primarily with revenue levels and product mix. The company believes that over the long-term, the gross margin percentage will be 50 percent plus or minus a few points. Intel's long-term gross margin percentage will vary depending on product mix.
Expenses are dependent in part on the level of revenue.
The tax rate for the remaining quarters of 1998 is expected to be 33.0 percent. The current estimate includes the acquisition of the capital assets of Digital Equipment Corporation's semiconductor manufacturing operations. The above statements contained in this outlook are forward-looking statements that involve a number of risks and uncertainties. Intel, the world's largest chip maker, is also a leading manufacturer of computer, networking and communications products.