Intel Corporation is expected to post strong second quarter earnings despite a downturn in the chip industry.

It now sees second quarter revenue of $7.39 billion or $0.08 per share from $7.18 billion or $0.06 per share. Analyst estimates $7.27 billion or $0.08 per share, according to Wedbush research.

The Semiconductor Industry Association predicts a 21 percent decline in worldwide chip sales to $195.6 billion this year.

Meanwhile iSuppli Corp’ analyst cut its 2009 forecast for chip sales, expecting a decline on revenue of 23% to $198.9 billion.

However, iSuppli expects semiconductor companies will post second quarter earnings with revenue guidance for 13% sequential growth on average and it will pave the way for a better year in 2010.

Recently, Intel reported first quarter net income decline of $647 million or $0.11 per share from $1.443 million or $0.25 per share a year ago. And revenue was $7.1 billion, down from $9.6 billion in a year earlier.

Share of Intel rose to $0.33 to 2.06% at $16.37 in the regular trading on Monday.