Intel warns of hard drive shortage
Thailand floods curtail company’s third quarter revenue
Intel Corp has warned that the flooding in Thailand, which has crippled hard-disk manufacturers, will cause a hard-disk supply shortage that will hurt its current-quarter revenue, according to Reuters.
Intel shares tumbled 4.8% on the news.
PC makers have been rushing to purchase the increasingly scarce hard drives after the flooding closed factories across Thailand, the world's number two exporter of the components.
"In the last two weeks, as the supply became more apparent, we saw a substantial change in our order rate. Most of our customers are concerned the shortage will continue -especially through the early part of the first quarter," Intel Senior Vice President Tom Kilroy told Reuters.
Since October, Hewlett Packard, Dell, Lenovo and Acer have warned that they may build fewer PCs as they use up their current stock of hard drives and struggle to replace them.
Intel's customers are reducing their stocks of chips in anticipation of the hard drive shortage.
Flood damage is expected to shrink global hard drive output by a third in the current quarter.
Western Digital has been hit hardest by the floods and has warned of tight global supplies into 2012.
The company expects a world shortage of 60 million hard drives in the December quarter.
Intel's chief financial officer said that he expects the hard drive shortage to increase adoption of solid-state drives (SSDs) as the main storage devices in PCs. Currently the much faster, but more expensive SSDs are only used in high-end PCs such as Apple's MacBook Air.