Hard-drive shortages may hurt AMD, Nvidia, too

Yesterday, Intel revised its guidance for the ongoing quarter, saying revenue would be below expectations because of the hard-drive shortages plaguing the industry. What of other major chip companies? According to two separate reports, there’s a chance AMD and Nvidia will both be forced to revise their estimates, as well.

TheStreet quotes Evercore Partners analyst Patrick Wang as saying the shortages "could impact AMD a bit more than Intel" in part because AMD "has made a living selling to cost-sensitive customers." Wang expects an announcement to that effect within the next couple of weeks. Another analyst quoted by TheStreet, Cody Acree of Williams Financial Group, disagrees that AMD will be hit harder, but he says the firm will nevertheless be "feeling some pressure."

A third analyst, this time quoted by International Business Times, believes Nvidia also won’t come out unscathed:

"Following our checks in Asia this week, we believe NVDA’s January quarter is tracking below plan. We believe the company’s GeForce (GPU), Quadro, and Tesla businesses combined are down about 10-12% Q/Q, with Quadro/Tesla somewhat weaker than GPU," Susquehanna Financial analyst Chris Caso wrote in a note to clients.

Last month, Nvidia said it expected flat revenue growth this quarter, with gross margin either flat or up half a point. (By the way, we should point out Nvidia’s ongoing fiscal quarter doesn’t correspond to the calendar quarter; it will end in late January.)

Comments closed
    • DavidC1
    • 8 years ago

    IMO the big companies that make factories should do geographic analysis before they build it. You wouldn’t build it in Japan, because of the earthquakes.

    You can’t prevent things from happening, but you can try to reduce the occurence of that happening. Volatile zones, places where natural disasters occur frequently. At least if you are going to build it, reinforce it to minimize damage.

    • Anarchist
    • 8 years ago

    last I checked I didn’t see price of PC any higher than it was before the “shortage” …

      • swaaye
      • 8 years ago

      Yeah I am not seeing it either. The HDD blame is a scapegoat I think, frankly.

        • NeelyCam
        • 8 years ago

        I think it’s probably real; it’s just that there’s still some old PC inventory left. HDD prices themselves have already gone up. Financially, these things just hit OEMs and their suppliers before the retail channel.

      • BrianLR
      • 8 years ago

      maybe that’s because RAM prices have plunged due to dumping, that could change once the fire sale is over, anyway it’s a good time to upgrade, I just got 4 x 8Gb DDR3 for under $200, a few months ago they were almost unobtainable and cost 3 to 4 times the price!

    • Welch
    • 8 years ago

    Another example of analyst not looking at the bigger picture.

    No one in the PC market for the most part is going to come out unscathed. If Intel got hurt, I’d expect AMD to get hurt, no kidding they are both CPU manufacturers! Going back to economics basics the only person who benefits from something like HDD shortages is the product that is a substitute. This usually means a cheaper alternative that most people didn’t consider because its not as good as the original or primary product. I’m talking of course about solid state drives as a substitute, but they are in most peoples eyes superior and no wheres near as inexpensive. The only time that they are inferior is when talking about storage capacity. But if you could pick up on a SSD for about the same price as a much bigger HDD, you’d do it, especially if its actually available.

    Anyway, back to AMD. The analyst said that AMD would be hit harder because they are targeting price conscious consumers? Why would this hurt them more than AMD? If anything you may even see people choose AMD over Intel just because they have to save that extra cash somewhere to make up for the increase in HDD prices. This of course is dependent on a persons elasticity of Intel’s CPU and platform. Businesses don’t for the most part care or know who makes the parts inside their systems, unless their IT department demands certain features that Intel systems provide (like V-Pro).

    In all honesty its a complete toss up on whether AMD will be hurt more or less. Will they be hurt…. No shit they are going to be hurt. But I wouldn’t jump the gun so fast and say they will be hurt more.

      • sschaem
      • 8 years ago

      This is not news but manipulation by WS. This was well known over a month ago and speculators have placed their bet way back then.

      All in all, Intel 7% lower revenue announcement this quarter is not lost sales, but delayed orders.

      BTW, 13.7 is close to their record high revenue income so even with those delayed sales Intel is growing at a monstrous rate.
      They ‘only’ made 11.5 billion in revenue last Q4, when their was no HD shortage whatsoever… Some perspective *please*

      • DavidC1
      • 8 years ago

      “If anything you may even see people choose AMD over Intel just because they have to save that extra cash somewhere to make up for the increase in HDD prices.”

      I can agree about that part, but there are places where HDDs are simply not available. The same reason why traditional relation between demand/supply and pricing doesn’t work applies here.

      Though, this is like arguing which side has lost more people in a war. No one truly wins.

        • Welch
        • 8 years ago

        I haven’t had too many issues getting HDDs, they just come at a premium.

        As for traditional relationship between demand/supply, you most certainly can apply that to this situation. That’s the entire purpose of that system, Supply/Demand, ect ect we all know.

        What I’m saying is that its pretty hasty for them to instantly state that it will likely hurt AMD more. I feel like as analyst they didn’t think about the entire picture before jumping to a conclusion that was only skin deep in its analyst. As sschaem said, who knows maybe it wont hurt them as bad because they don’t sell enough CPUs ahaha.

        Its just easy to say “AMD will do worse than Intel” because the majority of that time in the past few years its been true. Looks to me like a few analyst trying to score a freebie with the assumption that if the big guys (Intel) are hurting, then its going to hurt the little guys (AMD) more. Pure assumption.

        And not that I put 100% stock into what a CEO says about their own company, but I found it interesting that Rory Read just came out and said it wont hurt them that bad at all…. Bold move if he is lying to try and pull the wool over the markets and shareholders eyes in a time where he needs to seriously build credibility. If he really plans to bring AMD back up the ladder, then what he is saying needs to be true for his/their sake.

        • willmore
        • 8 years ago

        This is sort of like some items having a ‘negative price elasticity’ in economics (hope I got the right term). Basically, when times get tough, people stop buying luxury goods and normal goods, but they start buying more of these other goods. Think of things like mac-and-cheese and ramen noodles. When times get tough, people buy *more* of them.

        In the Intel vs AMD battle, AMD is the mac and cheese.

    • south side sammy
    • 8 years ago

    why rely solely on one place for your critical components. think anybody learned anything ?

      • mcnabney
      • 8 years ago

      This is nothing. Imagine a shooting war between Taiwan and PRC?

        • indeego
        • 8 years ago

        This is nothing. imagine all the people sharing all the world.

      • Farting Bob
      • 8 years ago

      The HDD’s themselves are assembled in a variety of places in Asia, but critical componants were being supplied to all companies from 1 or 2 manufactuers, all being made in the same area. This is the problem. There are so many parts involved in something as complicated as a HDD and it only takes 1 localised incident and suddenly nobody can assemble HDD’s, even if 90% of parts are able to continue being made.

      Nobody will learn though, they just go where the money is best.

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