Intel warns of diluted profits as Thai floods hit its supplies

The computing giant Intel Corp has become the latest technology firm to warn its profits will take a hit because of the continued fallout from Thailand's autumn floods.

Intel, the world's largest chipmaker, will miss fourth-quarter forecasts because of a shortage of supplies of hard disk drives.

Thailand is the key global supplier and has already admitted its output of hard disk drives slumped by 52 per cent in October against a year earlier, after the worst flooding in half a century.

Intel expects quarterly revenue of $13.7bn (£8.7bn), down from its earlier prediction of $14.7bn. The shares fell 4.2 per cent.

Rival Texas Instruments last week cut its forecasts.

Hendi Susanto, research analyst at Gabeli & Co, said: "Most people are expecting the hard disk drive supply will be constrained until at least the end of second quarter of 2012."

Intel says personal computer sales in the final quarter of the year should be up on the previous three months, despite the rise of tablets, as shoppers snap up gifts for the festive season.

But the company's gross margins have also taken a hit, dipping from 65% to 64.5 per cent.