Intel slashes Q4 revenue outlook due to hard drive supply shortages

- Monday, December 12, 2011

Intel slashes Q4 revenue outlook due to hard drive supply shortages

US chip manufacturer Intel has lowered its outlook for fourth quarter results due to hard drive supply shortages, the company said in a statement.

The company now expects fourth quarter revenue of US$13.7bn, plus or minus US$300mn - compared to previous expectations of US$14.7bn, plus or minus US$500mn.

Personal computer sales are expected to go up sequentially in the fourth quarter. But the worldwide PC supply chain is reducing inventories and microprocessor purchases as a result of the hard drive supply problems. The company expects the shortages to continue into the first quarter, followed by a rebuilding of microprocessor inventories as hard drive supplies recover during the first half of 2012.

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SHORTAGE

Intel is one of many hardware providers expected to be affected by events in Southeast Asia, as shown in a study by market research firm IHS iSuppli.

Global hard drive shortages triggered by flooding in Thailand are expected to result in a 3.8mn-unit shortfall in PC shipments during the first quarter of 2012. This will contribute to a reduced forecast for all next year, with global PC shipments now expected to expand only 6.8% in 2012, down from the previous outlook of 9.5%.

IHS predicts that worldwide PC shipments in the first quarter of 2012 will be 84.2mn units, compared to the earlier forecast of 88mn.

The bulk of reduced shipments will be for notebooks.

Starting in the first quarter of 2012, hard drive supply is expected to improve and to meet demand by the end of the third quarter of 2012. "Ironically, the [hard drive] market could face an inventory surplus by the end of 2012, after facilities in Thailand return to full production," IHS iSuppli said.