Hard Disk Drive Shortage Leads to Lower Projections for Intel's Fourth Quarter

By Ed Silverstein December 12, 2011

Intel Corporation has lowered its fourth-quarter projected results because of shortages of hard disk drives.

Revenue during the quarter is projected to be about $13.7 billion, which is lower than the earlier projection of $14.7 billion, according to a company statement. Industry analysts had projected $14.7 billion in quarterly revenue, which is the average of estimates compiled by Bloomberg News, according to Bloomberg Businessweek.

Hard disk shortages come as the PC supply chain lowered inventory and microprocessor purchases, the company statement adds.

Intel is further projecting that hard disk drive supply will continue to see a shortage during the first quarter of 2012. Supplies of hard disk drives are projected to improve during the first two quarters of 2012, with microprocessor inventories also rebuilding during that time, according to the company statement.

In addition, Intel reduced its projection in gross margin for the fourth quarter.

The shortages of hard disks have been linked to damage from widespread floods in Thailand, which took place earlier this year. Several key companies in the sector have plants located in Thailand. Over a thousand factories in Thailand closed because of flooding and related damage, according to news reports cited by TechZone360.

TechZone360 also reported that hard drives – such as those made by Seagate, Western Digital, Hitachi and Samsung increased by 40 to 90 percent (if not more) – at online sites at the end of October, citing news reports. InfoWorld was monitoring the prices and concluded that “consumers, businesses, and IT organizations are getting gouged,” TechZone360 adds. Prices on hard drives jumped as much as 180 percent after flooding in Thailand, according to TechZone360.

In response to the most recent news, Intel shares dropped close to four percent during Monday morning trading, reports The Associated Press. Intel is the largest chipmaker globally.

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves

TechZone360 Contributor

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