Intel’s revenue down to $13.7 bn

Intel, the world's largest maker of semiconductors, announced yesterday that its revenue this quarter would fall to $13.7 billion, from the earlier projected $14.7 billion, due to the flooding in Thailand that has sharply cut the world's supply of disk drives.

Without the drives, manufacturers would make fewer personal computers and computer servers, which meant the demand for semiconductors would be lower.

According to analysts, while this should not bring much cheer to Intel in the short run, there could be an opportunity for the chipmaker in the shortage of both components and finished personal computers, to fight the onslaught of tablet computers, particularly Apple's iPad. The company has been trying to build a business in ultrabook computers or ultrathins, which do not use hard drives.

Although the impact of the floods on the hard drive industry has been known since October, it has been in the last two weeks that PC makers have told Intel of their reduced requirements of chips.

According to Stacy J Smith, Intel's chief financial officer, this did not change its view that demand for personal computers and servers was healthy and growing, though constraints caused by the lack of drives would continue through the first quarter of 2012.

IHS iSuppli, a technology industry research firm, said last week that it expected PC shipments to expand in 2012 by only 6.8 per cent, down from the earlier projected 9.5 per cent.