SANTA CLARA, California (AP) — Chip maker Intel Corp. caused shares for the entire microchip sector to sink when it cut its fourth-quarter revenue outlook Monday.
Intel is the latest technology company to feel the impact of hard-disk-drive shortages stemming from monsoonal flooding in Thailand. The world's largest maker of microprocessors says it now expects fourth-quarter revenue of $13.4 billion to $14 billion, down from $14.2 billion to $15.2 billion during the key holiday quarter. Wall Street was looking for revenue of $14.65 billion, according to FactSet.
Shares of Intel, based in Santa Clara, fell $1.01, or 4 percent, to $24 on Monday.
Rival Advanced Micro Devices Inc. saw its shares slide 24 cents, also 4.3 percent, to $5.30.
Texas Instruments, meanwhile, fell 81 cents, or 2.7 percent, to close at $29.13.
Only stocks of financial companies fell more sharply. Their industry was dogged by renewed anxiety over the European debt crisis.
Thailand's widespread flooding in began in late August. The floods have caused factory shutdowns and hard-drive shortages. Thailand makes about a quarter of the world's hard drives and is the world's second-largest producer behind China, according to research firm IHS iSuppli.
Although worldwide PC shipments have been growing at a slower pace than expected this year, Intel has fared relatively well. In its third quarter, Intel posted net income of $3.47 billion, compared with $2.96 billion, in the same period a year ago. Revenue was $14.2 billion, compared with $11.1 billion a year ago.
On Monday, Intel said it expects PC sales to increase from the previous quarter, but not as much as it previously expected because companies are reducing their inventories due to shortages of hard drives.
Jefferies analyst Mark Lipacis said Intel was due to lower its forecast. Last month, AMD announced it would cut 1,400 jobs with personal computer sales slowing and delays in manufacturing. Texas Instruments Inc. lowered its fourth-quarter guidance last week.
ISuppli said earlier that it expects global PC shipments to total 84.2 million in the first three months of 2012, down from a previous estimate of 88 million. Intel also said it expects hard-drive supply shortages to continue into the first quarter.