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Acer Faces New Supply Problems As China Chokes

PC vendor Acer Australia who holds a major share of the gaming and education markets in Australia along with key Government contracts is facing new supply problems following new shutdowns in China, the impact comes despite supplies of processors stabilising for several PC companies.

The Acer business in Australia recently parted Company with former CEO Darren Simmons who had been with the Company 21 years.
He is now the CEO of a major property management business.

According to Acer chairman and CEO Jason Chen supply constraints which had “largely eased “in the first quarter, were now impacting the Company that late last week announced that revenues globally were down 22.9% year-on-year (YoY) and by 36.6% month-on-month (MoM) for the year-to-April 2022.

The monthly revenue decline was caused by multiple factors, but mainly due to supply-chain disruptions from the ongoing pandemic.

Acer’s overall business did include revenue growth across several categories.

B2B and enterprise notebook business grew YoY by 43.9% in April and by 28.5% year-to-date (YTD.

The Vero green PC business introduced overseas and recently in Australia grew 6% in April

Their Altos Computing business grew YoY by 114.0% in April and by 271.7% YTD

The public subsidiaries, in sum, grew YoY by 34.7% and by 36.5% YTD.

New business initiatives introduced by Chen contributed to 21.9% of Acer’s total business in April, compared to 14.4% a year ago.

Chen said late last week “Semiconductor shortage was the biggest problem in the first half of last year,” Chen said. “Now, we are beset by a supply chain issue caused by China’s lockdowns.”

With key components unable to be delivered several notebook manufacturers including Lenovo who are set to benefit from a Chinese Communist Party ban on foreign notebook suppliers are now facing new problems with production halted across several product groups.

Chen said, adding that a full reopening, and not gradual steps, would be the only way to resume production.

Inventory has increased to about twice its normal levels due to port gridlocks, he said, adding that channel inventory has recovered to pre-pandemic levels.

“Supply and demand balance is a task we have been trying to achieve. There is a great deal of difficulty in doing it right,” Chen said.

Acer experienced a significant decline in revenue about two years ago, as it did not have sufficient inventory to satisfy sudden demand due to the work-from-home and remote learning trends, he said.

Acer now has sufficient raw materials and finished goods in stock, he said.

Worldwide PC shipments fell 3 percent annually to 118.1 million units in the first quarter, Canalys data showed.

However, commercial PCs and green PCs are growing, despite the industry downtrend, as enterprises are purchasing computers for employees returning to offices, he said, adding that sales of Acer’s green Vero PC series expanded 6 percent month-on-month last month.

Acer expects back-to-school demand and the Christmas holiday to bolster demand, Chen said, adding that new 3D technology should also stimulate PC demand.

Last week Acer launched seven new PC series including green PC series, Vero PCs, with chassis utilizing 30 percent post-consumer recycled (PCR) plastics that help reduce 21 percent in carbon emissions.

The computer’s screen bezel uses 30 percent PCR plastics, and the keycap uses 50 percent PCR plastics.

Australian journalists were denied access to press releases on the new products unlike several other Countries. Acer’s PR Company did not have an answer as to why Australian journalists were denied access to information that other worldwide media got.

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