Advanced Micro Devices Inc.'s (AMD) chief executive Tuesday contradicted the chip company's main rival by downplaying the impact hard-disk drive shortages are having on the PC market, saying he doesn't expect much pressure on the quarter.

About 40% of the world's hard drives are manufactured in Thailand, where months of heavy rains have disrupted operations. Monday, AMD rival Intel Corp. (INTC), which supplies chips that power about 80% of the world's computers, lowered its fourth-quarter revenue guidance, citing the shortage's toll on computer production.

Tuesday, AMD Chief Executive Rory Read said while there's pressure in the market, he doesn't "see major pressure in terms of the quarter." He said hard-disk supply in the channel at the beginning of the period has kept the market "going pretty well."

"In 1Q and 2Q, maybe you see some manifestations, but I wouldn't bet against the supply chain," Read said at a Raymond James conference. "They're very resilient."

He added AMD still has a lot of opportunity to take market share even if the PC industry pares back its overall production.

In Thailand, most industrial zones that were inundated by the floodwaters are now dry, though high waters linger in some areas and authorities have warned it could be several months before all the affected factories are up and running again, as companies continue to assess the damage.

Many tech companies with operations in Thailand, including hard-drive maker Western Digital Corp. (WDC) and component supplier Hutchinson Technology Inc. (HTCH), have had to suspend some operations there.

ON Semiconductor Corp. (ONNN)--which makes audio and power-management chips used in mobile phones, cars and portable electronics--late last week said it was ending all production at its Sanyo Semiconductor unit sites in Ayutthaya, Thailand, and would maintain only limited production at its Bang Pa In site.

"The bulk of the company's Thailand operations will be permanently transferred to other existing ON Semiconductor facilities that have available production equipment capacity and excess floor space, and to some external subcontractors as appropriate," the company said on its website.

Most production will be moved to Malaysia, the Philippines and China, ON Semiconductor said.

Meanwhile, Read on Tuesday said AMD must focus more on its customers and market than it does on its chief rival Intel in order to gain share and boost performance. He noted AMD also needs to focus on companies that license ARM Holdings PLC (ARMH, ARM.LN) architecture, such as Qualcomm Inc. (QCOM).

"It's not that we turn our back on the competitors," Read said. "It's that we become customer- and market-focused."

Read didn't dismiss the possibility for AMD to license ARM architecture, saying it will depend on where the market goes and what customers want.

"What's most important is that you always listen to the customer," Read said. "When the customer speaks, the industry speaks, you've got to listen."

He said it would be a "very simple" decision to work with ARM if that was the direction the market went. But Read said AMD will continue focusing on improving its x86-based chips.

Read added Intel, with its dominant position in the PC market, will hesitate to make big changes as it seeks to protect the status quo. And companies making chips based on ARM architecture will face their own struggles with expanding into new markets, he said.

"We have a lot of IP and a lot of capability," Read said. "We're going to continue to play those cards, but as you move forward, making sure that you're able to be ambidextrous is definitely a winning hand."

-By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com

ON Semiconductor (NASDAQ:ON)
Historical Stock Chart
From Apr 2024 to May 2024 Click Here for more ON Semiconductor Charts.
ON Semiconductor (NASDAQ:ON)
Historical Stock Chart
From May 2023 to May 2024 Click Here for more ON Semiconductor Charts.