Computer chip maker Intel Corporation said today that its fourth quarter revenues will be significantly lower than previously estimated.
The world's largest semiconductor chip maker says microprocessors sales have been adversely affected this quarter because Intel customers are reducing their chip inventories. Manufacturers aren't buying as many Intel Chips because they are having difficulty sourcing reasonably priced hard disc drives to use with Intel chips to build computers.
The shortage of drives is a result of Heavy monsoon rains in Thailand in the second half of this year which led to the worst flooding the country has seen in the past fifty years. In the first half of this year, Thailand accounted for 40-45% of worldwide HDD production. Analysts say the flooding has disrupted operations at more than a dozen hard disk drive (HDD) factories and damage to the HDD industry is extensive.
The natural disaster has led to a shortage of hard drives and a dramatic price increase on existing drives. In Canada, the retail price of some hard drives has more than doubled in the last three months.
The full extent of the damage to HDD industry factories is still not known since some areas of Thailand remain underwater even today, over 5 months since the heavy rains began.
Intel says it expects hard disk drive supply shortages to continue into the first quarter followed by a recovery in subsequent quarters. Once hard drive supplies recover, Intel expects customers will rebuild their microprocessor inventories.
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