As Earnings Disaster Strikes, Intel Crying Inside

[qi:011] A few weeks ago Terry Gou, chairman of Taiwan-based Hon Hai Precision Industry Co., the world’s largest original equipment maker, warned that the troubles facing the technology industry (because of the global economic downturn) were much steeper than people realized. His comments were met with skepticism. Perhaps more should have listened. Intel today announced that the sales for the fourth quarter of 2008 will be at least 20 percent lower than its previous forecasts, which it had already slashed to begin with.

Given that Intel (s INTC) supplies chips to every major PC maker, it is a good proxy for the PC ecosystem and the troubles that will ensue. Dell (s DELL), for instance, is bracing for a rough 2009. Other device makers aren’t immune either. Memory-chip makers are hurting as well. The slower PC sales also impact Microsoft (s MSFT) as it impacts the total sales of Windows operating system and other applications. 2009 isn’t going to be an easy one.