Intel has been running on a relative high lately, having just celebrated the 40th anniversary of its first micro-processor, the 4004, and prior to that setting a new quarterly record, posting $3.1 billion year-over-year growth. But what should have been a continuation of good news through Q4 has been hampered by the recent hard drive shortage issue that’s been plaguing both hard drive vendors and consumers alike the past two months.
While Intel doesn’t produce its own hard drives, the health of its business relies heavily on other components in the ecosystems, including storage devices. With hard drives sporting prices at least 2.5x those a couple of months ago, less computers are being built, meaning that Intel is dealing with less demand for its processors. It’s a simple problem in theory, but a costly one for the company.
Original expectations were set at $14.7 billion (plus or minus $500 million), while those have been revised to $13.7 billion (plus or minus $300 million). Despite all this, Intel expects computer sales to be up during all of Q4, but that helps it none given that OEMs are slowing down on ordering CPUs in preparation for Q1. The company expects things to improve beginning in the first half of 2012, which is on par with what others have said.
Hate the fact that the hard drive you want is costing $100 more than before? Don’t feel bad… that’s still better than $1 billion!