When the chips are down, Intel(Nasdaq: INTC) always feels the pain.

Last night, the world's leading chip maker revealed it would miss first-quarter projections. Slammed by an inventory glut in its flash memory products due to poorly received price hikes, the company now expects revenue for the March quarter to come in between $6.6 billion and $6.8 billion. It had earlier forecasted revenue to come in as high as $7 billion.

Margins will also take a hit, with gross margins dipping below the 50% mark. Nostalgic Intel fans may recall when the company produced gross margins in the 62% range just two years ago, but the sector's been in a rut since then.

Microprocessors are cyclical, and this has been a painful drought for the industry and its popular bellwether. Intel's stock has been halved over the past year, and that comes on the heels of being cut in half over the previous year and a half. However, rival AMD's(NYSE: AMD) stock has fared worse. As has its business.

There's some comfort in knowing that the bulk of the miss is related to Intel's communications-related products rather than its bread-and-butter computer microprocessors. In other words, the company's not broken.