The notebook market is on edge as supply problems linger due to component shortages and freight costs “skyrocket” with retailers in Australia having to pad out stock in stores.
In fact, things are so bad when it comes to shipping and spiralling costs that US retailer Home Depot has reserved its own ship, bought merchandise on the spot market and flown in power tools as it copes with supply chain headaches.
The pandemic has created complexities that have ricocheted across the globe, from congested ports to soaring consumer demand with retailers in Australia now forced to space out stock to fill stores.
One of the most recent challenges is a Covid-19 outbreak in southern China that is hitting the production of components.
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According to DigiTimes research HP saw inventory increase in the channel in May, but shipments were weaker than expected, due to serious problems concerning components incompatibility with Dell facing similar issues.
Lenovo was the only vendor in the global top-three to achieve on-month shipment growth at one percent in May.
This was due to the company stocking inventory for a promotion deal in China, while the brand is gaining market share from other Chinese operators.
The top-3 ODMs’ combined notebook shipments fell 10 percent although Quanta had better on-month shipment growth than the other two makers, due to orders from HP and Apple.
First-tier brand vendors such as Acer, Lenovo, Dell and ASUS (Asustek Computer) are still optimistic about notebook shipments in 2021 and expect component shortages to last to the end of the year.
Commenting on the market rumour that many upstream chipmakers have cut their shipments for notebooks recently, some downstream component suppliers believe the reductions are a result of vendors making adjustment to their inventory levels in a bid to resolve the problems concerning incompatible components.
The big issue for PC manufacturers is the ongoing shortages of power management chips and display driver ICs will constrain notebook ODMs’ shipment growth to just single digits sequentially in the second quarter, according to industry sources with Intel, AMD, Qualcomm and MediaTek that shipments of Chromebooks are also slowing off the high numbers recorded last year.
Semiconductor suppliers expect Chromebook shipments to begin to drop in late 2021 into 2022.
Both Intel and AMD have reportedly reduced their shipment targets for Chromebook processors recently after surveying their demand from education and enterprise markets in various countries.
MediaTek and Qualcomm have also turned less optimistic about the global Chromebook market, expecting overall shipments to only reach 35 million units in 2021. They also have reduced the shipment forecasts for some of their Chromebook chips by 20-30%. If demand from the enterprise segment does not expand, Chromebook shipments are likely to start dropping.
With component shortages easing, the sources expect Chromebook supply and demand to be balanced in the second half of 2021, while component price increases will also reach an end.
Traditional consumer notebooks are also expected to witness weakening demand in 2022. Despite potential demand from the enterprise segment, thanks to a replacement trend, increased shipments of the enterprise models are still unlikely to help offset the declines from consumer notebooks and Chromebooks in 2022.
Since most upstream chip suppliers have already signed supply contracts with clients, most semiconductor companies will not see their shipments in 2021 affected, while demand for ICs is also unlikely to slump suddenly in 2022 but will weaken gradually throughout the year.
