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Intel will likely receive boost in opposite direction once shortage ceases and OEMs rebuild their inventories

Globally, personal computer sales and market demand continues to rise, posting their fourth consecutive quarter of growth.  You'd think Intel Corp. (INTC), the world's largest maker of personal computer central processing units, would be celebrating.  Instead its financial staff are reporting some unpleasant news.

Intel announced yesterday that it was dropping its outlook for fourth-quarter revenue from $14.7B±$500M USD to $13.7B±$300M.  GAAP and non-GAAP gross margins also dropped half a percentage point.  The cuts were due to shrinking microprocessor sales.

It turns out that the recent flooding which ravaged Vietnam, producers of one quarter of the world's hard drives, is still sending shockwaves through the personal computing market.  Hard drive shortages have hit the OEMs hard.  As they can't build computers without hard drives, they've turned to pushing much of their backup inventories onto the market.

wet hard drive

Meanwhile, the OEMs have cut their CPU orders from Intel to lower levels.  Sales won't be restored until the hard drive supply picks up again and the OEMs begin to rebuild their inventories.  

The good news is that Intel could enjoy a very strong H1 2012, the exepcted timeframe where the hard drive market will return to normalcy.  OEMs will be trying to build up their stock, while meeting the growing demand at the same time, and that adds up to a lot of component purchases.

In that sense, this revenue drop looks be more of a deferment that a true loss of business.  That said, it is still a painful one for Intel's investors.  The company's stock fell  1 a quarter percent following the news, which aired lated yesterday.

Source: Intel



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Vietnam?
By yomamafor1 on 12/13/2011 10:54:46 AM , Rating: 4
quote:
It turns out that the recent flooding which ravaged Vietnam , producers of one quarter of the world's hard drives, is still sending shockwaves through the personal computing market.


I thought it was Thailand that suffered from flooding? The link also goes directly to the news story about Thailand flooding.




RE: Vietnam?
By Phynaz on 12/13/11, Rating: -1
RE: Vietnam?
By Hieyeck on 12/13/2011 3:17:02 PM , Rating: 2
Give it up. Mick's vastly improved from his fear-mongering days. Anyone would slip up once or twice after hammering out and editing half a dozen articles.


RE: Vietnam?
By Cypherdude1 on 12/14/2011 7:42:45 AM , Rating: 2
quote:
It turns out that the recent flooding which ravaged Vietnam, producers of one quarter of the world's hard drives, is still sending shockwaves...
Thailand, it's Thailand. Ya made a wrong turn there bud.

Knowing that part of the world is subject to strong storms and flooding, it's kind of a strange place to build high tech plants. Now we're stuck with doubled up prices for the foreseeable future. I guess now SSD's will be more attractive, considering they're 10 times faster.


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