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KULIM, Malaysia, May 25 (Reuters) Intel Corp., the world's top computer chip maker, denied speculation on Thursday it might spin off and list its memory chip business. ''We are not currently thinking about those kind of things,'' Chief Executive Paul Otellini said when asked if Intel might make an initial public offer of shares in the memory chip business.

''What we are thinking about is simply allowing the memory factory team to work much more tightly aligned with the design team,'' he told reporters in the north Malaysian state of Kedah.

Last month, Otellini said he was launching a top-to-bottom review of Intel's operations amid intense competition from rival Advanced Micro Devices Inc. (AMD), fuelling talk of a business overhaul and a possible spin-off of the memory chip business.

Otellini was in Malaysia to open a $40 million design and development centre whose 900 staff will design microprocessors, chipsets and other components for use in Intel products worldwide.

Thursday marked Intel's 10th anniversary in Malaysia, where its investments amount to $3 billion, and it expects to have 10,500 employees after the design centre is fully staffed.

Intel, which has lost market share across the board to AMD, said on April 27 it expected 2006 revenue to fall about 3 percent to $37.7 billion. As a result, it will scale back planned direct spending by about 8 percent to a level roughly in line with last year's $11 billion.

It has also trimmed its 2006 gross margin estimate to 53 percent from an earlier forecast of 57 percent.

REUTERS CS RK1552