Intel Corp. today narrowed its Q2 revenue outlook in its mid-quarter update, after continued softness for its flash memory products.

The world’s largest chipmaker now expects Q2 revenue to be between $6.6 billion and $6.8 billion. Previously the Santa Clara, Calif.-based company had indicated Q2 sales would be between $6.4 billion and $7 billion.

On a conference call with analysts today, Andy Bryant, Intel’s CFO, said this was the first time a mid-quarter update has kept the same revenue mid-point and changed no other variable.

“It’s not that the numbers came out the same, it’s the fact that business was as we expected,” Bryant said.

Although Intel’s microprocessor business is trending to the high end of the normal seasonal pattern, demand for its flash memory remains soft.

“We’re in the same shape as two months ago which is, business is less than we hoped for and we’re doing all we can to regain market share,” Bryant said.

He added that some flash customers are beginning to return. In Q1, Intel increased its flash pricing, which resulted in a larger than anticipated decrease in demand. But Intel remains the world’s largest flash supplier, and analysts expect its dominance in this space to continue.

However, some analysts have expressed concern over Intel’s June performance. Q2 is regarded as the second most back-ended quarter, with as much as 40 percent of Q2 sales occurring during this month.

Analysts on the conference call also expressed concern over supply chain inventories having been built up on concerns regarding SARS and the war in Iraq.