Craig Berger, an analyst with FBR Capital Markets, now expects fourth quarter notebook units to decline 3 percent from third quarter and as much as 25 percent further in the first quarter of 2009, he wrote in a research note published Thursday (Dec. 18). Berger cited recent checks into fourth quarter PC builds with the five top notebook manufacturers and four top desktop motherboard makers.

Desktop shipments are now expected to decline as much as 27 percent in the fourth quarter and another 20 percent in the first quarter of 2009, Berger wrote. He is now forecasting overall PC builds to decline 15 percent sequentially in the fourth quarter and another 21 percent in the first quarter of 2009.

Last month, Berger said he was expecting 5 percent sequential growth in fourth quarter notebook shipments and a 15 percent sequential decline in desktops.

Based on the revised PC build estimates, Berger said he is now forecasting Intel's to decline 15 percent sequentially to $8.7 billion in the fourth quarter and another 10 percent to $7.8 billion in the first quarter of 2009.

Berger cut FBR's 2009 earnings per share estimate for Intel to 70 cents from 85 cents and the firm's share price target to $13 from $15.50. He maintained FBR's "market perform" rating, the equivalent of "hold," but said other stocks could offer more upside as they are trading at more discounted levels.

Berger, who earlier this month said he was expecting Intel to cut 6 to 7 percent of its total workforce, reported Thursday that the No. 1 chipmaker refuted the prediction that a meaningful headcount will occur. Intel said that total company headcount has fallen from 102,000 in June 2006 to 86,000 today, according to Berger.

In September 2006, Intel outlined 10,500 job cuts. Executives noted these cuts during the company's most recent earnings call in mid-October.

"However, with 2009 revenues expected to fall by almost 15 percent versus 2007 and 2008 levels, we wonder why Intel does not need to reduce factory headcount by 15 percent," Berger wrote. "Perhaps Intel should consider another round of headcount reductions to bolster financial performance and readjust to meaningfully lower demand levels."