The company has already stopped making the chip with the problem, but as is always the case with the incredibly complex process of semiconductor manufacturing, doing so is a costly process. Intel said it will reduce its revenue forecast for the first quarter by $300 million as it ends production of the old chip and gets volume of the new one ramped up. Total cost to repair and replace affected materials and computers already sold with the problem chip will be $700 million.

Those with long memories will recall Intel’s Pentium bug in the mid-1990s, which caused a big crisis of confidence in Intel chips, jokes from late-night TV hosts and a drop in the company’s stock price. This error is nothing like that. The company says the processor itself is unaffected.

Analysts are telling investors not to overreact. “Assuming pent-up demand for Sandy Bridge and mild competition, we think impact of this problem will be relatively small,” Standard & Poor’s analyst Clyde Montevirgen told clients in a note today. Mark Moskowitz of J.P. Morgan said it is likely that only a small number of end consumers are affected.

Meanwhile, Intel closed its $1.4 billion deal to acquire the wireless chip division of the German chipmaker Infineon, and said it expects to finally close its $7.7 billion acquisition of McAfee by the end of the quarter.

The combination of those two deals plus the chip trouble caused Intel to issue new guidance for the first quarter. It now expects first-quarter sales in the range of $11.3 billion to $12.1 billion, which is slightly higher than previous guidance. However it shaved three points off its gross margin forecast: The mid-point of the range is now 61 percent, down from 64 percent.

Intel shares are down more than one percent at the moment, while shares of rival Advanced Micro Devices are surging by more than five percent.

Apple is slowly but surely closing in on Microsoft in market cap.

According to Standard & Poor’s analyst Howard Silverblatt, Apple’s float-adjusted market capitalization reached $241.5 billion Thursday, edging past Microsoft’s $239.5 billion.

Said Silverblatt: “It came right down to the trade, but AAPL has an index market value of $241,534 million and MSFT has a market value of $239,515 million–AAPL is #2.”

Which means Apple (AAPL) is now second only to oil giant Exxon Mobil (XOM) on the S&P–on the index’s float-adjusted basis.

But on a full-market value basis–which, as Dan Frommer explains over at Business Insider, includes “shares that are closely held by control groups, other publicly traded companies or government agencies”–Microsoft (MSFT) remains firmly in second place, with a market cap of $275 billion–significantly larger than Apple’s.

So this float-adjusted achievement of Apple’s is really more of a psychological milestone than anything, one made possible only because S&P is counting just the 87 percent of Microsoft’s shares that are available for public trading. Below, a chart from Silicon Alley Insider that shows more clearly what’s happening.

[Chart credit: Business Insider]

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Last night, the company posted results for its fiscal second quarter ended July, which beat the Street impressively on the top line, but at the cost of lower-than-expected gross margins, resulting in a miss at the EPS level. The Street commentary this morning is mixed: Quite a few analysts contend this is a temporary issue, that the company knows it got overly aggressive on pricing in Europe generally–on notebooks in particular–and can fix the issue quickly. But others contend that Dell’s turnaround has taken a giant step backward. They worry that there is more trouble ahead and note the company’s warning that IT spending is showing signs of slowing not only in the U.S. but also in Europe and some countries in Asia. The results didn’t change a lot of minds on the stock overall; the one downgrade of the stock I spotted came from Standard & Poor’s analyst Tom Smith, who cut his rating to Hold from Buy, asserting that with “unsteady margin patterns” likely to continue, it is time to “take a less aggressive stance.”

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