Intel cuts Q4 revenue estimates as hard drive shortage bites

Intel has become the latest company to feel the pinch from the ongoing shortage of hard disk drives, warning that PC vendors have cut their orders for Intel components.

As a result, the company expects a dip in quarterly revenues from roughly $14.7bn to $13.7bn.

Intel said that it is likely to be the first quarter of next year before PC vendors can restock inventories and place new orders for microprocessors.

The earnings adjustment is the latest indication that the PC market is taking a major financial hit from the hard drive shortage.

The problems were caused by flooding at manufacturing facilities in Thailand, and are expected to keep as many as four million PCs from reaching the market over the holiday season and into 2012.

Early projections suggest that the situation will not be fully alleviated until the third quarter of the year.

Rob Enderle, principal analyst for the Enderle Group, told V3 that, while enterprise orders will be filled once hardware is available, vendors will not be able to recoup lost consumer sales from the holiday season.

"It is hard to recover after the end of a year. Consumers are going to take that money and spend it elsewhere," he said.

Enderle also believes that the hard drive industry could diversify geographically. Manufacturing costs will continue to dictate where facilities are built, but component builders could look to emerging regions such as South Africa for additional factories.