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Ukraine War Kills Two-Year PC Sales Boom

Inflation and the ongoing invasion of Ukraine have led most global computer brands to cut their sales and shipping forecasts for the next six months, bringing an end to two years of PC demand fuelled by the pandemic.

HP, Dell, and Asus have lowered production orders for the coming quarters, according to sources cited by Nikkei Asia.

“We started to receive notices from some clients to build less components and parts since the middle of February and we’ve been in constant communication with the clients in the past one month over the dynamic market situation since the war,” a executive of a HP, Dell, Lenovo, Acer and Asustek supplier told Nikkei Asia.

“Now one of their priorities is to carefully manage their inventory level at retail channels.”

MSI’s President Joseph Hsu has indicated to investors that the current April-June quarter will mark the lowest production quarter this year due to the war, adding that inventory levels are “rather high.”

Shipments of Chromebooks could drop more than 40 per cent this year, down to approximately 20 million units.

Total PC shipments are expected to drop by “a single digit on the year in the three months through June”, according to Nikkei.

This sounds more dire than it is – the PC market grew 13 per cent in 2020, and another 14 per cent in 2021. This may just be a market correction of sorts, accelerated by the war.

JP Morgan forecasts a 6 per cent decline in 2022 for the PC market.

“The main PC market growth driver for the last two years has been consumer and education computers, but education-purpose Chromebooks already slowed down mid-last year and continue to remain weak. Consumer and gaming PC demand also saw some softness,” Gokul Hariharan, co-head of Asia-Pacific technology, media and telecom research with JPMorgan, said.

“Momentum in the enterprise sector may not be able to offset all the slowdown in the consumer-end.

“If there is a weaker macroeconomic environment emerging, then we might see enterprise IT spending budgets also start to come down in the future.”



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