AMD Does Not Expect Thai Flood to Reduce Demand Towards Its Chips

Advanced Micro Devices does not expect potential shortage of hard disk drives caused by flooding in Thailand to affect its business performance in the fourth quarter. The company projects that existing inventory of hard drives to be enough for Q4 2011 and is more concerned about its own supply problems conditioned by poor yields of 32nm chips at Globalfoundries.

"We do not see an impact in the fourth quarter, to be very honest, at least after discussing with our customers. We will have to see how this is going to impact the supply chain moving forward and into 2012. It depends on a lot of things, how long this situation is going to continue, and then how much damage needs to be repaired. But in short term, not much of an impact," said Thomas Seifert, chief financial officer of Advanced Micro Devices, during a conference call with financial analysts.

Due to flooding in Thailand, largest maker of hard drives Western Digital had to close its HDD manufacturing facilities down, while Seagate Technology suffers tight supply of components, which also reduces its output. In case there is a shortage of drives, PC makers will be unable to sell computers and will thus cut orders for microprocessors. Independent analysts believe that there will be enough hard drives for Q4 2011.

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