Today I'm at Intel's financial analyst meeting, that is hosted for the first time, in the company's 40 year history, at its corporate headquarters in Santa Clara, California. Whereas in the past, meetings with analysts from major financial institutions were held in New York. As press/blogger this is a great opportunity to meet casually with the company's execs and get a thorough update on Intel's business. I'll be updating this page with more details and videos as the day unfolds.

NAND Flash is hurting Intel margins
The first thing Intel CEO Paul Otellini spoke about weaknesses in the NAND market that forced the company to post a gross margins warning earlier this week. In a nutshell, the NAND market is on a slump: Intel sees a 53% drop in NAND flash pricing in Q1, far worse than the 27% previously forecasted. And this, after a 28% price erosion in the prior quarter. These price drops has affected both revenue and the value of inventory that has to be written off. And then came the big splash.

"You have my personal commitment that this business will not be a drag on the company... we're going to fix it or make sure it's profitable... We entered the NAND business assuming we're going to make money", said Otellini.

So, if Intel can't make the NAND business work or can't repair it somehow then it'll divest it like it did with its NOR Flash business, now called Numonyx and a joint-venture with ST Microelectronics. Apparently, Intel's dependency on a few customers, Apple notably who ordered less than expected for its iPod, is the cause of this margins call. To offtset this, Otellini believes SSD or Flash based disk drives might be the answers. But it's still a niche and Intel might not have the IP it takes to build such disks reliability as a Seagate or a Sandisk will.