Intel reduced its quarterly revenue forecast this week as the hard drive shortage continues to shake up the PC industry. But its main chip rival, AMD, says it doesn’t expect much of an impact.
According to a MarketWatch report, AMD CEO Rory Read doesn’t anticipate the disrupted hard drive supply chain to put much pressure on AMD’s fourth quarter revenue. The channel’s hard drive supply at the beginning of the period was enough to keep the market "going pretty well," Read said.
Not all chip makers are expressing Read’s level of optimism. In addition to industry leader Intel, semiconductor manufacturers including Texas Instruments and Altera have lowered their quarterly revenue projections, as the effects of the hard drive shortage spurred by the Thailand floods take their toll on the PC industry.
The October floods in Thailand wiped out about 40 percent of the world's hard drive manufacturing, as vendors including Western Digital found their facilities submerged in as much as six feet of water. With a shortage of hard drives, a shortage of PCs is almost inevitable – and many industry analysts are suggesting just that. IHS iSuppli, for example, predicts a 3.8 million-unit shortfall in PC shipments in the first quarter of 2012. As a result, PC vendors including Lenovo, Acer and Asus have said they are bracing themselves for a hit.
"Substitutes for HDD are very few, so if the situation persists, not only notebook production will be affected but also desktops, and other component shipments will also drop," said Asus CFO David Chang.
Todd Swank, vice president of marketing at Nor-Tech, a Burnsville, Minn.-based solution provider, isn’t entirely convinced of AMD’s expressed immunity to the shortage. “I think it’s an odd thing to say,” Swank told CRN. “When Intel came out with their shortfall… that just goes to show that there is going to be a shortage of system sales in general, and I can’t say that AMD is dominating in any category over Intel.”
Read did play it a bit safer at a Raymond James IT supply chain conference in this week, admitting that there was a possibility the hard drive shortage could deal a blow to AMD early next year. His confidence, however, remained intact. "In 1Q and 2Q, maybe you see some manifestations, but I wouldn't bet against the supply chain," Read said, according to MarketWatch. "They're very resilient."