Intel Warns Q4 Revenue Will Fall Short of Expectations, Blames HDD Shortage

Posted 12/12/2011 at 8:44am | by Paul Lilly

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Effects of the hard drive shortage resulting from major flooding in Thailand earlier this year continue to reverberate throughout the technology industry. Even Intel, the world's largest chip maker, isn't immune to to it all, and in fact the Santa Clara outfit warned today that its fourth quarter results are expected to be below the company's previous outlook.

Intel now expects Q4 revenue to be $13.7 billion, plus or minus $300 million, down $1 billion from its previous forecast of $14.7 billion, plus or minus $500 million.

The chip maker said PC sales will likely rise in the fourth quarter, but the worldwide PC supply chain is reducing inventories and processor purchases as a direct result of HDD supply shortages. This will continue into the first quarter of 2012, with companies expected to rebuild processor inventories in the first half of next year as the HDD market recovers.

Intel also lowered its Q4 gross margin to 64.5 percent, plus or minus a couple of percentage points, down slightly from the previous forecast of 65 percent, also give or take a couple of percentage points.