"We are just barely meeting demand in the first-half of the fourth quarter," Intel executive vice president and general manager of the Intel architecture group Paul Otellini said and added that the current demand is even stronger than it had forecast.

He also told analysts on a conference call that its gross margins for the year would likely to be in the range of 52 per cent of revenues, plus or minus a few points.

"We expect to meet previous guidance of 52 per cent gross margins, plus or minus a few points," chief financial officer Andy Bryant told analysts.

The world's largest chip maker released third quarter earnings that were better than Wall Street expectations, but some analysts were disappointed by Intel's forecast for fourth quarter revenues that are expected to be "up slightly" from third quarter.

"Thebiggest challenge we face is being able to produce enough parts to meet our customers needs," Bryant said.

Intel said that it saw strength across the board in all its products and that it was constrained across all products in the third quarter, including some mobile processors.

Intel also said its new Celeron processor, for the lower-cost PC market, is now the second biggest selling processor in the world, after only two quarters on the market.

The executives also said Intel's average selling prices had remained flat in the past five quarters, due in part to the success of its product segmentation strategy.

For example, sales of its higher-cost Xeon processors for servers and workstations offset the lower priced Celeron chips, resulting in a steady average selling price.