Intel chief executive Paul Otellini reportedly told employees in Taiwan that Microsoft’s Windows 8 operating system is being released before it’s done, according to Bloomberg.

If it’s true, it’s a big “whoops” moment. After all, if Windows 8 is a dud, then Intel’s own chip sales will suffer, as Intel is the world’s largest maker of PC microprocessors. Intel hasn’t commented yet to us and declined to comment to Bloomberg.

Update 2:15pm Pacific: Intel said the report was “unsubstantiated” and posted the following statement:

Intel has a long and successful heritage working with Microsoft on the release of Windows platforms, delivering devices that provide exciting experiences, stunning performance, and superior compatibility. Intel fully expects this to continue with Windows 8.

Intel, Microsoft and our partners have been working closely together on testing and validation to ensure delivery of a high-quality experience across the nearly 200 Intel-based designs that will start launching in October. Intel CEO Paul Otellini is on record as saying “Windows 8 is one of the best things that ever happened to Intel,” citing the importance of the touch interface coming to mainstream computing and the huge wave of exciting new Ultrabook, tablet and convertible device innovations coming to the market.

But the wording of the response is not actually a denial. According to the Bloomberg report, Otellini had said that improvements still have to be made to the software. He spoke to a group of employees at a meeting in Taipei yesterday, the report said. Windows 8 has touchscreen features and is aimed at making Microsoft’s user experience consistent across the PC, tablet, and smartphone. It is Microsoft’s answer to the popularity of Apple’s iPad and iPhone.

Otellini’s comments seem like a rare moment of candor. But Microsoft has said for some time that it will ship Windows 8 on Oct. 26.

“With over 16 million active preview participants, Windows 8 is the most tested, reviewed, and ready operating system in Microsoft’s history,” said Mark Martin, a spokesman for Redmond, Washington-based Microsoft in a comment to Bloomberg.