Firm Thinks More Factors Than HDD Shortage Behind Intel's Reduced Q4 Revenue Forecast

Nomura Equity Research, an investment broker, recons that factors other than, and more significant than hard disk drive (HDD) shortage caused due to the recent Thailand floods affecting HDD manufacturing, are behind Intel's reduced Q4 forecast. Earlier this week, Intel shaved off close to a billion dollars from its Q4 Revenue Guidance, leveling the blame on HDD shortages, as HDD is a near-indispensable component in manufacture and assembly of a vast majority of PCs. Nomura Equity Research thinks "weak sell-through" is that other factor.

Nomura Equity Research said "HDD shortages are a concern, but we think weak sell-through is also contributing to the $1 billion shortfall." It continues, "We see softness in China, continued demand for ARM-based more power-efficient devices, and low volumes for ultrabooks." Intel is clearly feeling the heat with depleting demand for Wintels, as entire PC form-factors are challenged by leaner, fitter computing devices such as tablets, netbooks, and smartphones driven by ARM processors are growing in demand.

Nomura adds "We would not be surprised to see below-seasonal growth in Q1 and Q2 given lack of PC catalysts (Windows 8 likely Q3 event), increasing ASP pressure, and slowing China and Europe." It concludes its report by cutting its forecast for Intel sales revenue in 2012 by $3 billion to $53.4 billion, a fall from its estimate for Intel's 2011 sales revenue of $53.8 billion.

Source: EETimes