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Intel has posted a 48% rise in quarterly net profits, as strong sales of server microprocessors more than offset weak demand for chips used in personal computers.

The world's largest microchip-maker made a net profit of $3.4bn (£2.1bn) in the last three months of 2010, up from $2.3bn a year earlier.

Its revenues were also ahead of market expectations, rising 8% to $11.5bn.

Intel said 2010 was the best year in its history.

Sales of its microchips for data centres were up 15% in October-December, while those for PCs were flat.

For 2010 as a whole, Intel's net profit totalled $11.7bn, up from $4.4bn in 2009.

RBC Capital Markets analyst Mahesh Sanganeria said Intel's latest figures were "great".

Earlier this week, Intel agreed to pay Nvidia $1.5bn to use its smaller rival's graphics chip technology.

Analysts said the move will enable Intel to increase its presence in hand-held computers, smartphones and tablet computers.