- Associated Press - Monday, January 31, 2011

SANTA CLARA, CALIF. (AP) - Intel says it found a design flaw in a recently released computer chip and will discontinue its production. While the flaw will mean lost revenue, the chip maker is raising its overall revenue outlook.

Its shares are down 1.5 percent in morning trading.

Intel Corp. said Monday it has stopped shipment of the chip, codenamed “Cougar Point” and has developed a fix. It says the issue will reduce revenue by about $300 million in the first quarter.

But recent acquisitions are pushing overall revenue higher. Intel says in now expects total revenue of $11.7 billion, plus or minus $400 million. Its prior outlook was for $11.5 billion, plus or minus $400 million.

Analysts polled by Factset expect $11.5 billion.

Intel says it expects revenue to grow in the mid- to high teens in all of 2011. It previously expected a growth of about 10 percent.

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