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AMD and Nvidia blame Thailand for drop in GPU sales

The flooding in Thailand and the resultant impact on HDD availability has affected GPU sales, according to both AMD and Nvidia.

Leading manufacturers AMD and Nvidia claim that the floods in Thailand have heavily impacted their ability to sell graphics processing units (GPUs).

Intense floods in the country halted production at many factories making hard disc drives (HDDs). While the recovery continues, many analysts have speculated that production will not reach pre-flood levels until perhaps 2013.

AMD chief executive officer Rory Read and his Nvidia counterpart Jen-Hsun Huang claimed last year that the floods would have little impact, The Verge reports.

However, the companies have now changed their minds, with Nvidia claiming that the hard drive shortage has been a major contributor to a $116 million (£73 million) reduction in expected revenue during the last quarter of the year.

AMD's financial results were similarly flat, with pressure caused by the HDD supply reduction resulting in a $177 million (£112 million) loss in the fourth quarter of 2011 and a lower than expected profit of $491 million (£312 million) for the full year.

The logical reasoning is that fewer available HDDs means fewer PCs being made, resulting in reduced up-take of GPUs.

However, Nvidia claims that some original equipment manufacturers are looking at the price of HDDs - which has gone up due to the reduced supply - and choosing not to include GPUs in their systems at all.

While Nvidia and AMD have taken a hit, the success of the solid-state drive (SSD) market is thriving after the Thailand flooding.

Reduced HDD availability has prompted more companies to use SSDs. With the rise of the ultrabook also fuelling this market, data from the International data corporation shows that global revenue in this sector reached $5 billion (£3.2 million) in 2011, representing an increase of 105 per cent from 2010 figures.

It also expects annual growth in this sector to be around 51 per cent.ADNFCR-1220-ID-801276230-ADNFCR