Intel predicted first-quarter sales on improvements in the personal computer and data centers. Revenue will be $14.8 billion, plus or minus $500 million, the company said Thursday in a statement.

Chief Executive Officer Brian Krzanich said he's making progress in trying to generate revenue from more diverse sources such as cars and mobile phones while lessening the chipmaker's reliance on a shrinking PC business. The results reported Thursday showed that Intel has carved out more sales in some areas, but profit is still tied to demand for processors running server computers in giant data centers.

Intel reported 8 percent revenue growth to $4.67 billion in its data center unit. Server sales were hurt by the shift of corporate computing to outsourcing with cloud service providers, the company said. Krzanich said that Intel will return to double-digit percentage growth in server chips, helped by increasing demand in networking and communications.

The company's client computing group, which sells PC chips, gained 4.3 percent to $9.13 billion in the fourth quarter. For the year, the company is predicting that PC shipments will decline in the mid-single-digit percent range.

Fourth-quarter net income was $3.6 billion, or 73 cents a share, compared with $3.6 billion, or 74 cents, a year earlier. Revenue rose 10 percent to $16.4 billion. Profit, excluding certain items, was 79 cents a share.

"The fourth quarter was a terrific finish to a record-setting and transformative year for Intel. In 2016, we took important steps to accelerate our strategy and refocus our resources while also launching exciting new products, successfully integrating Altera, and investing in growth opportunities," said Brian Krzanich. "I'm pleased with our 2016 performance and confident in our future."

Adjusted gross margin, or the percentage of sales left after subtracting production costs, narrowed to 63.1 percent from 64.8 percent a year earlier, Intel said.

Intel predicted that 2017 annual revenue will be roughly flat. The company expects revenue to grow in the low single digits after excluding the Intel Security Group from both years.

Intel plans to boost spending in 2017 on new plants and equipment to about $12 billion, an increase of about $2 billion from last year. The company is shipping its first Optane memory modules for testing and expects the 3D Xpoint-based Optane memory modules to reach products next year.

Optane is a new class of nonvolatile memory and storage based on 3D Xpoint, which was developed jointly by Intel and Micron.

Intel's first Optane products, announced this month at CES, are low-capacity SSDs that fit into the storage slots of PCs.

Optane memory DIMMs are intended to replace DRAM in servers and PCs. The DIMMs will fit into DDR4 slots.

Optane SSDs have performed 10 times faster than conventional SSDs. Intel has said Optane memory can be 10 times denser than DRAM.

Advancing to 7-nm

Intel also announced it was establishing a pilot plant during an earnings call on Thursday. The pilot plant will test manufacturing of 7-nm chips. Intel hasn't said when it'll start shipping 7-nm chips in volume, but it won't be in the next two to three years.

The pilot plant has limited production, but it sets the stage for Intel to invest billions in larger factories to make smaller 7-nm chips.

Intel's latest chips, based on Kaby Lake, are made using the 14-nanometer process, and the company is now moving to 10-nm with its upcoming Cannonlake chip, which was shown in a PC at CES earlier this month.

Cannonlake chips will ship in small volumes by year-end, and their availability will expand next year, Intel CEO Brian Krzanich said during the earnings call.

Intel dealt with product delays and had to move away from its decades-old schedule of advancing the manufacturing process every two years. Intel also made three new chip technologies -- Broadwell, Skylake, and Kaby Lake -- with the 14-nm process.

The company has hinted it would introduce EUV (extreme ultraviolet) tools in the manufacturing process.

Competitors like Globalfoundries has said it will start making 7-nm chips by 2018, and ARM has released tools for the design of 7-nm chips.

Samsung and Globalfoundries have just started making 10-nm chips like Qualcomm's Snapdragon 835, which will appear in smartphones soon.