Santa Clara, CA - The world's largest chip maker Intel Corp. (NASDAQ GS: INTC) is expected to report weak, but not negative, earnings over the next few quarters in 2009 as the company survived the dwindling technology market with some bruises, last year.

The company has certainly spurred worries among the investors ahead of its fourth-quarter results to be released on Thursday after the close. But it is not the only firm that has slashed earnings outlook as economy cratered.

Texas Instruments Inc. (NYSE: TXN), the world’s third largest chipmaker, also issued sharp reduction in its fourth quarter outlook last month, projecting sales of about $2.4 billion, below its previous expectations of $2.9 billion.

"The slump at Intel won't be a limited case in the semi-conductor segment; further profit warnings will follow," Harald Schnitzer, analyst at DZ Bank, said in a note, according to Reuters.

The good news is that the technology sector will be revived with an increase in investments by global businesses and governments on computer, software and communications products and consulting services by 2010, the analysts from Forrester Research said in a report on Tuesday.

Considering the neutral effect of currency changes, the overall technology spending is expected to gather pace in 2009 by growing 3 percent and by 6 percent in 2010, the report indicated.

Intel recently issued second warning on revenues on Jan. 7 for the fourth-quarter. The chipmaker now expects its revenue to drop by 20 percent, compared to the previous estimate of 14 percent drop, as demand for personal computers was even worse than it had feared.

The Santa Clara, California-based company added that its revenue would be about $8.2 billion, down 20 percent from the second quarter and 23 percent decline on year over year basis. It said that this is "a result of further weakness in end demand and inventory reductions by its customers in the global PC supply chain."

Although the revised forecast by the Silicon Valley company may have disappointment many investors, the company has consistently improved its performance with the launch of new products. The company has stepped up to raise bars on its high-performing and energy-efficient chip that it already sells to computer makers.

The company has also indicated that it does not require cutting a significant number of workers, which will help it weather the current slump. Intel had slashed positions around three years ago, when it had 103,500 employees.

By the end of third quarter, the company had eliminated 20,000 jobs. The reduction in positions provided the company with extra capital.

“They are sufficiently profitable that even in a lousy economy they can hold on to people and sustain their new-market initiatives,” David Wu, a San Francisco-based analyst for Global Crown Capital LLC, told Bloomberg.

He has a neutral rating on the shares of the company. He added, “The rich can afford to do things the poor cannot.” The firm has already reported better-than-expected results by posting a 12 percent rise in third quarter profit.

At 10:36 a.m. ET in New York, shares of the firm were trading down by 10 cents or 0.73 percent to $13.69, after it hit low of 14.18 earlier in the trading. The stock has hit a low of $12.06 and a high of $25.29 in the last 52-week period with average volume of 71.29 million.