Intel's weakness not just about HDDs, says Nomura

LONDON -- Investment broker Nomura Equity Research reckonsthe $1 billion that Intel shaved off its forecast for its Q4 sales revenueis about more than just a shortage of hard disk drives hurting PC sales andthereby Intel's sales of microprocessors.

Nomura has reduced its own estimate of Intel's Q4 sales by$800 million to the same figure as Intel; $13.7 billion. But it does not seethe hard disk drive situation being as being the only reason that the reductionis required.

In a note to clients entitled "Intel finally blows up," andsubtitled "Change in outlook may highlight issues beyond HDDs," Nomura saidthat problems at Intel are based on a wider set of challenges. "HDD shortagesare a concern, but we think weak sell-through is also contributing to the $1billion shortfall. We see softness in China, continued demand for ARM-basedmore power-efficient devices, and low volumes for ultrabooks," the notesaid.

In other words demand for PCs and ultrabooks is weak, butdemand for ARM-based processors to go in smartphones and tablet computers ishigh. The ultrabook is Intel's favored form factor that it hopes will takemarket share from tablet computers just as tablet computers have taken marketshare from the notebook computer and killed the netbook at birth.

Nor does Nomura hold out much hope for Intel in the firsthalf of 2012. "We would not be surprised to see below-seasonal growth inQ1 and Q2 given lack of PC catalysts (Windows 8 likely Q3 event), increasingASP pressure, and slowing China and Europe," the report said.

As a result Nomura has cut its forecast for Intel salesrevenue in 2012 by $3 billion to $53.4 billion, which would be a fall from itsestimate for Intel's 2011 sales revenue of $53.8 billion.

This story was originally posted by EE Times.
 


Intel's weakness not just about HDDs, says Nomura