Intel pessimistic over hard disk drive shortage

Posted by Emma Woollacott

The shortage of hard drives caused by the recent floods in Thailand is starting to hit other tech vendors hard.

With Thailand experiencing floods worse than anything seen in a generation, production of electronics has ground to a standstill.

And as PC manufacturers scale back production becuase of the shortage, they're ordering less of everything else, prompting Intel to drastically cut its sales forecasts.

Intel's now forecasting fourth-quarter sales of between $13.4 billion and $14 billion, more than $1 billion less than its previous estimate. It says it expects supplies of hard disk drives to recover in the first half of next year, boosting its own microprocessor sales at the same time.

According to analyst firm IHS iSuppli, hard disk drive shortages triggered by the floods mean that worldwide PC shipments in the first quarter of 2012 will amount to only 84.2 million units, compared to an earlier forecast of 88 million.

"The PC supply chain says it has sufficient HDD inventory for the fourth quarter of 2011," says Matthew Wilkins, senior principal analyst for compute platforms at IHS.

"However, those stockpiles will run out in the first quarter of 2012, impacting PC production during that period."

Ironically, says iSuppli, the disk drive market could face an inventory surplus by the end of next year, after facilities in Thailand return to full production.

With production having been ramped up elsewhere, the recovery in Thailand’s HDD operations could result in excess supply - potentially good news for consumers, who could see lower prices.

In the meantime, consumers are best advised to avoid buying a drive if they can, with many prices having doubled in recent weeks.