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Intel cut Q4 sales projection by $1 billion

Intel have cut their Q4 sales projection by $1 billion, citing supply shortages due to the floods in Thailand.

The flooding caused damage to many factories in Thailand that produce disk drives. Intel say that while they don’t make disk drives, the shortage has caused wide spread problems within the industry as a whole, especially for companies building their own computers. This has had the knock on effect of them cutting orders from Intel for new processors.

Almost half of the world’s supply of disk drives is produced in Thailand and the floods disrupted operations at more than a dozen major factories.

Stacy Smith, Intel’s chief financial officer told analysts “We are seeing a reduction in inventories across the supply chain.”

The shortages could also cause prices to rise, effecting the consumer in the high street. Organisations such as Hewlett Packard, Dell and Apple have all said that the flooding may cause problems for their business on some level.

Intel’s stock fell by 4 percent after the announcement.

The floods caused damage across a wide spread area of Thailand

Mercury News added “But as a result of the disruption, IDC believes the volume of PCs sold could be 10 to 20 percentage points lower than previously expected in the first quarter of 2012, Loverde said. Before the floods, IDC had forecast PC shipments to increase by 8 percent in the first quarter, from 80.5 million units a year earlier; it’s now predicting a decline of 2 to 13 percent.

Leading computer-makers have been reluctant to publicly quantify the shortage’s impact. Palo Alto-based HP said last month that it expects sales to suffer, although CEO Meg Whitman said the world’s biggest PC-maker will get “more than our fair share” of available disk drives because of long-standing relationships with suppliers.

At Intel, which sells chips to most of the world’s computer-makers, Smith said the impact has become clearer in the past two weeks, as disk-drive companies began telling customers what their allotments are likely to be in the coming months.”

Kitguru says: Analysts are claiming that disk drive production should return to normal in the first half of 2012, although confirmed dates have not been mentioned yet.

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