Supply chain mayhem a possibility, says Intel

Global - Intel has cautioned that the current credit crunch could lead to serious supply chain disruption and the potential liquidation of key industry suppliers.

According to media sources, the US-based company, which makes up to 80% of microprocessors that power personal computers, is reliant on a global network of suppliers.

"Current uncertainty in global economic conditions poses a risk to the overall economy as consumers and businesses may defer purchases in response to tighter credit and negative financial news, which could negatively affect product demand and other related matters," Intel said.

Intel continued, "There could be a number of follow-on effects from the credit crisis on Intel's business, including insolvency of key suppliers resulting in product delays."

Cody Acree, analyst at Stifel Nicolaus, suggests that to ensure continuity,  Intel could choose to buy out those suppliers at risk

"Intel has US$12 billion on the balance sheet so there's quite a bit of room for them to step in and make sure the supply chain is not disrupted," said, Acree.