Intel, the world's largest computer chip maker which has its European headquarters in Pipers Way, Swindon, has announced first quarter profits, for the three months to March 27, of $1.7 billion.

This is an increase of 89 per cent and almost double the $915m for the same period in 2003.

The company, whose worldwide headquarters are based in Santa Clara, California, said the huge increase in profits was due in part to corporations extending their IT budgets.

Revenue grew by 20 per cent to $8.1 billion, compared with $6.75 billion for the same period 12 months ago.

Earnings per Intel share are 26 cents, up from 14 cents, but short of Wall Street's forecast of 27 cents.

The company had initially been less than confident about its sales expectations for the first quarter, blaming a stockpile of semiconductors in Asia.

Andy Bryant, Intel's chief financial officer, said: "Last year the strength was being driven by the emerging markets. We're now starting to see IT spending in all markets pick up."

Swindon-based Rick Skett, the company's director and country manager for UK and Ireland added: "Intel's first quarter results showed healthy growth in both revenue and earnings compared to a year ago, led by continued strength in all markets, IT spending and the launch of several new microprocessors based products.

"The combination of these products plus new processors and major innovations coming later this year positions us well for continued growth and is great news for the 800 Swindon based employees and the local economy."

The company's forecast for the second quarter sees revenues of between $7.6 billion and $8.2 billion, with a gross profit margin of approximately 60 per cent.

Intel, which boasts 78,000 employees worldwide, was founded in 1968 and created the world's first microprocessor in 1971.

In Swindon, Intel employs a staff of approximately 800 plus, and earlier this year, Purton-born Donald J MacDonald who attended Bradon Forest School and Swindon College was named Intel's vice-president of sales and marketing (worldwide branding and campaigns).

Mr MacDonald had spent nine years working at Pipers Way before moving across the pond.