Firm Thinks More Factors Than HDD Shortage Behind Intel's Reduced Q4 Revenue Forecast

[btarunr]

Nomura Equity Research, an investment broker, recons that factors other than, and more significant than hard disk drive (HDD) shortage caused due to the recent Thailand floods affecting HDD manufacturing, are behind Intel's reduced Q4 forecast. Earlier this week, Intel shaved off close to a billion dollars from its Q4 Revenue Guidance, leveling the blame on HDD shortages, as HDD is a near-indispensable component in manufacture and assembly of a vast majority of PCs. Nomura Equity Research thinks "weak sell-through" is that other factor.

Nomura Equity Research said "HDD shortages are a concern, but we think weak sell-through is also contributing to the $1 billion shortfall." It continues, "We see softness in China, continued demand for ARM-based more power-efficient devices, and low volumes for ultrabooks." Intel is clearly feeling the heat with depleting demand for Wintels, as entire PC form-factors are challenged by leaner, fitter computing devices such as tablets, netbooks, and smartphones driven by ARM processors are growing in demand.

Nomura adds "We would not be surprised to see below-seasonal growth in Q1 and Q2 given lack of PC catalysts (Windows 8 likely Q3 event), increasing ASP pressure, and slowing China and Europe." It concludes its report by cutting its forecast for Intel sales revenue in 2012 by $3 billion to $53.4 billion, a fall from its estimate for Intel's 2011 sales revenue of $53.8 billion.

Source: EETimes

[matar]

Always blaming it on someone else...

[kyussgr]

So lets see if i got it right.....

AMD produces bulldozer which becomes a sellout success and
Intel produces i5 and i7 and has revenue problems......

Yeah baby!

[LAN_deRf_HA]

Probably spent too much cash on trying to sell a workstation platform to consumers. Wish they'd pack it in already. 1150 is going to walk all over 2011 in all but what, like 5 programs? If you need those 5 then get a damn server board. It made sense with 1366. It came first after all, but not this time.

[matar]

Always blaming it on someone else.
Intel X79 LGA2011 is the problem.
x79 motheboards is By far NO NO way near of the X58 when it was Released.

[btarunr]

Originally Posted by kyussgr

So lets see if i got it right.....

AMD produces bulldozer which becomes a sellout success and
Intel produces i5 and i7 and has revenue problems......

Yeah baby!

That's because Bulldozer wasn't even produced in numbers that amount to 1% of Intel's production.

[erocker]

Now would be a great time to ramp up SSD production and give mechanical storage a run for its money.

[kyussgr]

Originally Posted by btarunr

That's because Bulldozer wasn't even produced in numbers that amount to 1% of Intel's production.

It doesn't matter if you produce millions of chips.... if you don't sell then you lose money..... Sorry

[btarunr]

Originally Posted by kyussgr

It doesn't matter if you produce millions of chips.... if you don't sell then you lose money..... Sorry

That doesn't beat my argument.

[kyussgr]

Originally Posted by btarunr

That doesn't beat my argument.

What I meant is that if you are losing money.... then you are losing money....
The issue is not who produces more.... The issue is who makes profit.....

You say that Intel produces more chips but has problems selling them.
On the other hand AMD produces less chips but sells them all (at pretty much the same price as Intel) and makes profit (despite the fact that they are crappy,)...

or it is because they are paying girl bands to promote their chips in Asia.

Check out these youtube links (this is promotion for sandybridge) go to the end of the song where the girls sing the Intel tune.... The other link is the girls singing the song on the sandybridge unveiling......

http://www.youtube.com/watch?v=fSQwCK_8VSM

http://www.youtube.com/watch?v=VE-jXOVyk6s

[btarunr]

Originally Posted by kyussgr

What I meant is that if you are losing money.... then you are losing money....
The issue is not who produces more.... The issue is who makes profit.....

You say that Intel produces more chips but has problems selling them.
On the other hand AMD produces less chips but sells them all (at pretty much the same price as Intel) and makes profit (despite the fact that they are crappy,)...

Again, flawed argument. You're assuming that all AMD does is sell Bulldozer. Read up Q4 forecasts of both AMD and Intel (refer to AMD's Q3 results for Q4 forecast). Bulldozer maybe a sellout, but that's also because it's produced in very small quantities to begin with (because GloFo 32 nm is still teething). Bulldozer isn't contributing to AMD's Q4 Forecasts much.

Also, you're assuming that processors have a shelf life (like cakes and cookies), and that if they don't sell, Intel loses all the money spent in making it. That's not true. If it doesn't sell now, it will sell later, and Intel will adjust production (and introduction of new products) according to inventories.

[DannibusX]

Hi Intel, I'm the global recession. Nice to meet you.

[kyussgr]

Originally Posted by btarunr

Again, flawed argument. You're assuming that all AMD does is sell Bulldozer. Read up Q4 forecasts of both AMD and Intel (refer to AMD's Q3 results for Q4 forecast). Bulldozer maybe a sellout, but that's also because it's produced in very small quantities to begin with (because GloFo 32 nm is still teething). Bulldozer isn't contributing to AMD's Q4 Forecasts much.

Also, you're assuming that processors have a shelf life (like cakes and cookies), and that if they don't sell, Intel loses all the money spent in making it. That's not true. If it doesn't sell now, it will sell later, and Intel will adjust production (and introduction of new products) according to inventories.

Sorry maybe I misread.... I thought the purpose of YOUR article was to tell us that Intel is losing money
Now you try to tell me that they are doing ok?

And yes, processors have a self life because when the new generation chips get out people tend to buy the new ones and not the old ones. And Intel has to sell the old ones to the big PC manufacturers at reduced prices to get rid of them. What are you talking about?
Do you think that prices of CPUs in PC shops reflect the prices that big integrators buy them?

Also in MY Managerial World if you are a million off you prediction, selling a good product, you are close to getting fired. If you are a billion off your prediction, selling a good product.........
In My Managerial World if you manage to sell-out an inferior product you are a hero (especially if the product got so much bad press). The fact that you should have produced a good product is another story....

Anyway I made a short comment..... and this has become a war of attrition....
Why don't you watch the youtube videos with the Intel girlies and relax a little

[btarunr]

Originally Posted by kyussgr

Sorry maybe I misread.... I thought the purpose of YOUR article was to tell us that Intel is losing money
Now you try to tell me that they are doing ok?

The purpose of my article was to tell you that Intel won't make as much money as it thought it would, not that it will incur losses. Lower revenue doesn't necessarily mean losses, if the supply beats demand, then there will be loss. But if the supply is timely adjusted with the demand, then there's no loss.

Originally Posted by kyussgr

And yes, processors have a self life because when the new generation chips get out people tend to buy the new ones and not the old ones.

Um, no. Intel's processors can command their market prices for over three generations ahead. You'll still find new Core 2 Duo E8600 priced at its normal $325, and Core i7-870 at its $289 price point, for example.

Even if you argue that "golly, then 'three generations is the shelf life'", then that won't apply to this argument. It only talks about Q4 2011 and 2012 forecast. Plenty of time to digest any excess inventories that Intel has of the chips manufactured around this time.

Originally Posted by kyussgr

And Intel has to sell the old ones to the big PC manufacturers at reduced prices to get rid of them. What are you talking about?

Again, wrong. Seldom does Intel do "clearance sales", especially with OEMs.

Originally Posted by kyussgr

Do you think that prices of CPUs in PC shops reflect the prices that big integrators buy them?

Actually, PC shops sell "within 3 generations" CPUs at nearly the same prices they commanded when they formed Intel's "current" lineup.

[Fx]

Originally Posted by kyussgr

or it is because they are paying girl bands to promote their chips in Asia.

http://www.youtube.com/watch?v=fSQwCK_8VSM

http://www.youtube.com/watch?v=VE-jXOVyk6s

wow...really Intel... really??

[DigitalUK]

dam why dont we have adverts like that over here, i could watch that all day...lol

intel should do a bundle deal i5 + asian girl = sold out

AMD dont seem to be producing many bulldozers 8120/8150 (maybe bad yeilds), its very hard to find any in stock as i have afew customers who want one, nobody knows exactly how many they are selling but ive never seen it so hard to find a cpu in stock, i dont think they are selling that many just not producing very many.
ive also built alot of intel i5 2500k systems in the last few months, so i dont think intel will be losing money just not making as much as they wanted.

[RejZoR]

Maybe because Intel drives costs as much as those super speed 500MB/s drives, yet they perform far worse?

[kyussgr]

Originally Posted by btarunr

The purpose of my article was to tell you that Intel won't make as much money as it thought it would, not that it will incur losses. Lower revenue doesn't necessarily mean losses, if the supply beats demand, then there will be loss. But if the supply is timely adjusted with the demand, then there's no loss.



Um, no. Intel's processors can command their market prices for over three generations ahead. You'll still find new Core 2 Duo E8600 priced at its normal $325, and Core i7-870 at its $289 price point, for example.

Even if you argue that "golly, then 'three generations is the shelf life'", then that won't apply to this argument. It only talks about Q4 2011 and 2012 forecast. Plenty of time to digest any excess inventories that Intel has of the chips manufactured around this time.



Again, wrong. Seldom does Intel do "clearance sales", especially with OEMs.



Actually, PC shops sell "within 3 generations" CPUs at nearly the same prices they commanded when they formed Intel's "current" lineup.

Let me tell once again....

The prices that you see in shops are not the prices that big integrators buy the chips for.
The fact that your neighborhood's PC Store has a couple of core duos and keeps its prices up awaiting for a victim is one thing. A big integrator will buy these old chips by the thousands and produce these cheap ass machines that you see costing 400 dollars. Dell won't give 300US for a Core2duo... Come on....

Another thing from a managers perspective... Even smaller companies than Intel DO NOT TOLERATE reduction in revenue. This is considered a failure. The company is a Billion off its sales target and you say that this will not result in a loss?...

[mediasorcerer]

I got to chime in and say, socket 2011 is ridiculously expensive, what were they thinking, if im going to pay 600$ instead of 300$ for a cpu, then it should be twice as powerful yes? otherwise, whats the point,what were they thinking? the bigger they get, the harder they fall i suppose,

Maybe many companies out there in the business are sick of intels monopoly , could be a part of it, they may be colluding to suruptitiously squeeze intel out, albeit done in such a way that its incremental and imperceptible maybe.just a thought.

[DannibusX]

Originally Posted by kyussgr

Let me tell once again....

The prices that you see in shops are not the prices that big integrators buy the chips for.
The fact that your neighborhood's PC Store has a couple of core duos and keeps its prices up awaiting for a victim is one thing. A big integrator will buy these old chips by the thousands and produce these cheap ass machines that you see costing 400 dollars. Dell won't give 300US for a Core2duo... Come on....

Another thing from a managers perspective... Even smaller companies than Intel DO NOT TOLERATE reduction in revenue. This is considered a failure. The company is a Billion off its sales target and you say that this will not result in a loss?...

You need to calm down a little bit. Like for real.

[kyussgr]

Originally Posted by DannibusX

You need to calm down a little bit. Like for real.

I am the calmest and the most patient person that you will ever know.

He tells me that I don't know which is the difference between cookies and CPUs? He is the great analyst with the insiders knowledge? He knows how Intel operates? It is ok to be a billion off your sales target and this can be fixed by adjusting production?

No my friend it is he that he has to calm down. I am calm and drinking my coffee

[btarunr]

Originally Posted by kyussgr

Let me tell once again....

The prices that you see in shops are not the prices that big integrators buy the chips for.

No shit sherlock. As if any post of mine reflected that I didn't know that.

On the other hand, your getting excited over Bulldozer getting sold out at a time Intel is reducing its forecasts (which is in no way an indication of loss), shows that you have no clue about how the supply chain or markets work. It's not that AMD is doing good at a time when Intel is not. AMD's Bulldozer volumes don't even amount to 1% of Intel's volumes. AMD's market cap isn't even a few percent that of Intel.

AMD produced very less to begin with (because of 32 nm foundry problems), sold out whatever little it produced, and got the token "sold out, hip hip hooray" distinction for people like you to get excited over.

Originally Posted by kyussgr

The fact that your neighborhood's PC Store has a couple of core duos and keeps its prices up awaiting for a victim is one thing.

It's not just my neighbourhood store, but any major retailer in any continent.

$285~$320 /1000uq is the current channel pricing. The price Dell has to pay Intel if it wants Core 2 Duo E8600.

Originally Posted by kyussgr

A big integrator will buy these old chips by the thousands and produce these cheap ass machines that you see costing 400 dollars.

Yeah, but those are with >3 generations old chips. Such retailers will make a killing out of 65 nm Conroe Core 2 Duo chips, those too, with E4000, low-end E6000 chips. But channel prices shoot up just one generation ahead (Wolfdale-3M and -6M).

Originally Posted by kyussgr

Dell won't give 300US for a Core2duo... Come on....

If it has orders for a specific model with Core 2 Duo, it will have to pay that much. Even today. Conventional logic doesn't apply in the channel.

[lashton]

Originally Posted by btarunr

That's because Bulldozer wasn't even produced in numbers that amount to 1% of Intel's production.

In think btarunr has lost the plot, check GF production records for BD and they produced ALOT and i mean ALOT of BD chips, the Investment brokers dont know why Intel made a loss, but great to see AMD can make a crappy (speedwise) processor and make a profit, and intel cant haha