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Processors Worth Cents Stalling PC Industry, Claims Acer Boss

PC manufacturer Acer, which has been witnessing record growth in both Australia, the USA and in Asia, has said supply issues have worsened in recent weeks and that retailers could be impacted, the issue is not main board processors but processors costing cents.

ChannelNews understands that brands such as Lenovo, Hewlett Packard (HP) and Dell are also affected by component shortages.

“We are continuously facing a condition that demand always exceeds supply,” Acer Chairman and CEO Jason Chen said last night.

“We feel growing pressure because of the component shortages, and our staff are working with additional efforts to chase all the components needed every day.”

Chen a former TSMC executive who are one of the world’s largest processor manufacturers claims that global supply chains have been grappling with shortages of semiconductors and other components since last year, when the “stay-at-home economy” of the coronavirus pandemic began fuelling demand for computers, servers, gaming consoles and other devices.

Another problem facing processor manufacturers is that more products need processors from noise cancelling headphones to a new generation of motor vehicles and that capital investment in new plants has not been able to keep up with demand.

Chen said the situation is still a “happy problem” for Acer, as the PC industry is expected to continue growing in 2021.

However, he declined to provide a specific growth forecast given the supply uncertainties.

“It’s really a phenomenon that the industry has never seen in the past. The shortages are not about core chips such as central processing units [CPUs] and graphic processors, which are worth $100 or $200, but mainly about companion chips that are only worth 80 cents or even 50 cents per unit,” Chen said. “But devices and computers still need these companion chips to be complete.”

Chen added that the component shortage is likely to last until at least the last quarter of this year. “It’s not only about chips, either. The tightness is also in logistics and transportation, including fighting for containers and fleets,” he said.

Acer, the world’s fifth-largest PC maker, commands just under 7% of the global market and logged 23% growth in shipments last year. The overall PC industry grew 13%, its best performance since 2010, according to data from IDC.

The PC industry began to suffer shortages of a wide range of components late last year, ranging from Wi-Fi and power management chips to image sensors, audio-related components and displays. Demand from the auto industry at the beginning of this year for more chips has tightened supplies further claims Nikki Asia.

Other major PC makers, including top U.S. players HP and Dell, are also fighting to secure more chips to maintain their growth momentum.

“We also see that gap between supply and demand,” an industry manager with knowledge of Dell’s production told Nikkei Asia. “The company has to decide wisely on the allocation of the chips that it has, and it does need to adjust some of the business plans and forecasts.”

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