HP REPORTS SHORTGAGES

HP buys a vast number of processors from Intel and their CEO indicated that the ongoing shortages will likely persist until at least Q3 this year. HP and Dell also have indicated problems with supplies.

HP CFO Steve Fieler said on a Q2 conference call last night that its Personal Systems division expects “CPU supply constraint to continue through the third calendar quarter”.

HP also earns money from printer supplies and that division has also struggled. Paper documents are not as widely used as electronic versions are now more popular.

Smaller manufacturers are finding their orders are not being fulfilled. Asus, Apple, Lenovo and others are finding it hard to get enough processors. Lenovo recently indicated they would move production out of China to avoid the trade ware.

Blaming Intel for lower growth might be an easier option for some PC makers. Reality is that demand for new machines has slowed over the last 7-8 years. The market is saturated and many use the same machine for more than the lease standard 2-3 years.

The next cycle will ramp up in September with back to school. This has been the main driver for upgrades.