Tech firms get finance boost

 
Steve Dinneen
Follow Steve
FINANCE firms replacing their computing infrastructure is driving a surge in the technology industry, according to Intel’s European boss Tristan Wilkinson.

A number of major UK?finance firms have updated their systems to cope with increasing demand for high speed transactions, after a two-year lag caused by the recession.

Intel on Tuesday reported a third successsive quarter of record results, 56 per cent ahead of comparative pre-recession levels.

However, Wilkinson told City A.M. the firm is still “cautious” about the UK due to macroeconomic conditions, especially in the consumer sector, which saw a dip in profits.

But he said: “We are not worried about a double dip recession – we see continued growth – but there is still pressure on consumer demand.”

He added he does not see the impending hike in the rate of VAT, from 17.5 per cent to 20 per cent in January, as a major problem.

Wilkinson added: “We don’t think it will have an explicit impact on our business. Computers are part of everybody’s lives now. It isn’t something people will stop buying. People want to be up to date, with the latest technology.”

He also called for the technology sector to engage with the government in its austerity drive, saying investment in the right technology can be the difference between spending pennies and spending pounds.

Intel’s results raised hopes that the technology sector could end 2010 on a strong note. However, analysts warned not all chip makers would fare as well as Intel.

Intel said that by early 2011 it should close its acquisitions of the wireless unit of German chipmaker Infineon for $1.4bn (£880m) and security software specialist McAfee for $7.7bn. Both deals are seen as stepping stones into the growing mobile market.