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As Intel exits the first half of the year, company executives said the stars were aligned for an even stronger future performance. Intel reported revenue of $9.5 billion for the second quarter, down 2 percent from the first quarter but up 9 percent from the same quarter a year ago. Net income rose to $1.6 billion, up 11 percent from the previous quarter but up 25 percent from a year ago.

In total, the number of microprocessors Intel sold were higher than expected, and sales of both mobile microprocessors and chipsets set records. During a conference call, Intel chief executive Paul Otellini declined to answer a question from an analyst Tuesday afternoon on whether the company expected to take market share from rival AMD. "I'll let the numbers speak for themselves," he said.

Within Intel's Mobility Group, the chip giant recorded revenue of $2.74 billion, up slightly from the first quarter. Intel's Digital Enterprise Group recorded microprocessor sales of $4.11 billion, down slightly from $4.24 billion in the prior quarter. Intel also noted that the sales of notebook PCs "crossed over" and became the dominant category during the quarter, earlier than expected.

But in both groups, chipset revenue was up, a good leading indicator that OEMs who have bought and soldered the chipsets down to motherboards also planned to buy microprocessors in the coming weeks.

But the big boost, executives said, was due from Atom, the processor designed for low-end netbooks. Intel executives didn't indicate that overall demand was high; in a disclaimer, Otellini noted that the company was "very aware" of the economic problems plaguing the globe.

Instead, Intel's plan is focused on keeping costs low, both by developing low-cost processors like the Atom, as well as ramping 45-nm fabs like the one the company opened in Chandler, Ariz. last year, and in Israel earlier this month. Three more are expected to go online this year, before Intel switches to 32-nm lines sometime in 2009.

"We expect unit shipments of Atom processors to grow strongly in the second half," Otellini said. "Our product lines are superbly positioned."

Two potential pitfalls may emerge, however: a possible shortage of test equipment for the Atom, and a shortage of chipsets to pair the processor with, executives said.

In the third quarter, Intel expects revenue of between $10.0 billion and $10.6 billion, the company said.