Intel has eased fears that a slowing economy is having an effect on the technology industry, issuing an above expected forecast for the current quarter and telling investors that global demand for its chips remains "solid".

The chip-maker's chief executive, Paul Otellini, said that the first quarter had marked "a very good start to 2008" and that the company's results demonstrated " a strengthening core business and a solid global market environment."

Intel shares rose by 9 per cent in after hours trading — from $20.91 to $22.74, having closed up 1 per cent before the results were published.

Mr Otellini said that the rosy forecast was in part based on strong demand for Intel's new '45-nanometre' chips, which are incorporated in the server computers used by financial institutions and other large organisations, particular in the US.

There were also good prospects for the chips used in a new range of 'mini-laptops', which will allow consumers to access the internet on devices with a screen larger than that on a mobile but smaller than on traditional portable computers, the company said.

Intel, regarded as a bellwether for the technology industry, said that that it now expected gross profit margins in the second quarter to be 56 per cent — as compared with the previous forecast of 54.9 per cent. It added that the gross margin for the full year would be 57 per cent, beating analyst estimates of 56 per cent.

Revenues rose by 9 per cent, from $8.85 billion to $9.67 billion. Net income fell by 12 per cent to $1.4 billion — 25 cents a share, from $1.64 billion — 28 cents a share — in comparison with the same period a year ago, but the quarter had included a restructuring charge amounting to 4 cents a share, the company said.

The results were published among widespread concern among investors that a weakening global economy may affect consumer demand for electronic devices, including computers, media players and mobile phones.

Last month, Intel said that tough competition in the market for NAND flash memory — the chips used to store information in portable devices such as phones — had put pressure on prices, forcing it to lower its gross profit margin forecast from a previous estimate of 56 per cent.

"Certainly there had been oversupply in NAND flash, and that forced us to drive down our expectations," Graham Palmer, director of Intel UK and Ireland, said in an interview.

Mr Palmer said that Intel expected strong growth in a new category of ultra-portable computer called 'netbooks', which aim to provide an 'internet in your pocket'-style service to consumers on a device with a 10-inch screen about the size of a paperback.

Intel's first quarter results are likely to contrast sharply with those of its great rival, Advanced Micro Devices (AMD), which has suffered from product delays and falling market share in recent months.

Analysts expect that AMD, which last week lowered its guidance for the quarter and also announced it would lay off 10 per cent of its workforce, will report a net loss of $263 million — or 42 cents a share, when it releases its results tomorrow.

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