Rory Read, chief executive officer of Advanced Micro Devices, said on Tuesday that he did not see tight supply of hard disk drives (HDDs) as a factor that will have a major impact on the company's performance this quarter. By contrast, its arch-rival Intel Corp. has reduced its revenue forecast by $1 billion due to shortages of hard drives.
"I do not see major [HDD shortage-related] pressure in terms of the quarter. It is about executing and delivering. [...] I have been through eleven supply chain market events, battery fires, LCD shortage, memory shortage, I have seen them all [...]. This is a very resilient supply chain. In the beginning of the quarter there were a lot of hard drives supply in the channel and that kept things going pretty well; in Q1 and Q2, maybe you see some manifestations, but I would not bet against the supply chain. From AMD perspective, we have a lot of opportunities given the current market share," said Rory Read, chief executive officer of AMD, during IT Supply Chain conference organized by Raymond James.
Last quarter AMD lowered its revenue guidance significantly due to lower-than-expected yields of microprocessors produced by Globalfoundries using 32nm silicon-on-insulator process technology. Since not all the issues are resolved in Q4, AMD's primary concern is not HDD supply, but its own ability to ship new products, including key A-series Fusion "Llano" chips as well as Opteron and FX-series microprocessors based on Bulldozer micro-architecture.
But AMD's own problems with yields and supply do not mean that the company will not be impacted anyhow by the tight supply of hard drives. Since many of AMD's central processing units and accelerated processing units are aimed at price-sensitive customers, increase of hard drives prices will either force PC makers and end-users to choose less expensive APUs and CPUs or even wait with their purchase. In general, PC price increases or shifts towards less rich product lineups due to HDD shortages may catalyze many to get tablets instead of, for example, netbooks.
The industry in general believes that tight supply of hard disk drives as a result of tragic flooding in Thailand will persist throughout the first half of 2012. Seagate Technology predicted that the HDD supply chain will get back to normal condition by the end of next calendar year.