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HP says Intel's supply chain back to normal

The supply problems that plagued Intel in the second half of the year have largely subsided, at least from Hewlett-Packard's point of view, its CEO said Wednesday.

"Processor supply has finally normalized," said Mark Hurd during a conference call on HP's first-quarter earnings. "We were worried about that a bit in the fourth quarter."

Intel's factories were essentially overflowing last year from stronger-than-expected overall PC demand in the second half of the year coupled with new investments in manufacturing technology that were just starting to come online. This forced it to cut back on the production of desktop chipsets, which in turn affected the demand for Intel's desktop processors and caused Intel to post disappointing fourth-quarter results.