San Francisco - Computer chip giant Intel on Wednesday warned of a fourth-quarter sales plunge of more than 23 per cent and said it expected to record an investment loss of about 1 billion dollars when it reports earnings for the fourth quarter of 2008 on January 15.

The announcement came just two months after the world's largest chipmaker slashed its initial sales forecast for the period, signaling the rapidly deteriorating conditions in the tech sector. Intel originally forecast between 10.1 billion dollars and 10.9 billion dollars in revenue, but reduced that estimate to about 9 billion dollars mid-November.

Intel now expects revenues in the crucial holiday period to be just 8.2 billion dollars, down from 10.7 billion dollars a year earlier. The 23-per-cent plunge marks a larger drop than the 20-per- cent decline that Intel suffered following the dotcom bust in 2001.

The news sent Intel shares down by 6.5 per cent to 14.37 dollars in morning trading on the Nasdaq before they recovered to lose just 3.5 per cent. (dpa)