The easing of chip and component shortages will boost shipments of Sony's PlayStation 5 (PS5) gaming consoles in the second half of 2022 and 2023, according to industry sources.
Although prospects for consumer electronics remain unclear in the second half, prospects for the Sony PS5 remain good. While the easing shortages could strengthen PS5 shipments starting in second-half 2022, some sources say rising inflation may have an effect on consumer demand since gaming consoles are a non-essential item.
Consumer electronics are facing a weak peak season in the second half. Still, according to supply chain sources, gaming console shipments are expected to surpass the 2021 volume, which was affected by the component shortages. Even though the shortage still exists, it has eased and is driving related supply chain shipments.
Junichi Nagai, chairman of Taiwan-based cooling module maker Nidec Chuan-Choung Technology (CCI), said the company experienced revenue growth of 21% in 2021, including 18% growth for notebook computers, 43% for desktop computers, and 12% for network products. Gaming-related revenue reached an on-year growth of 86%. Revenue from other products amounted to 15% in 2021 and is expected to reach 18% in 2022.
CCI remains optimistic about operations in second-half 2022 and expects revenue to increase. The company noted the factors that contributed to profit erosion in 2021 have improved. The NT$ exchange rate and the falling price of raw materials such as copper and aluminum are now conducive to profit performance and are expected to lead to operational growth over to 2021.
CCI said shipments in the second half will be positive due to servers, network communications, and "other products." It did not disclose what is included in "other products."
Industry sources revealed that "other products" mainly include cooling components required by Sony PS5s. CCI entered the cooling supply chain for Sony PS5 through its parent company Japan-based Nidec, the sources added.
Shipments for Sony PS5s did not meet expectations in 2021, according to sources, not because of poor market sales, but because the supply side was impacted by IC shortages, which resulted in shortages of the game console.
Now with shipments for many consumer electronics being revised downward, gaming console makers originally unable to get their hands on components will have an opportunity to obtain more materials, driving overall shipment performance.
Sony is confident in PS5 sales, recently estimating that 18 million PS5s will be sold during the April 2022 to March 2023 financial year, a 56% on-year increase over the previous financial year of 11.5 million. This number is particularly attractive compared to the downward revisions facing both notebooks and smartphones.
Sony estimates 80,000 PS5s will be sold every 82 minutes, which would have taken the PS4 nine days to match.
Other gaming consoles, including Microsoft's Xbox and the Nintendo Switch, were also affected by the chip shortage. As the shortage eases, their shipments are likely to rise. However, some sources pointed out that this rush is a short-term phenomenon, as gaming consoles are still considered consumer products and will be impacted by rising inflation and economic downturn.
At the same time, some supply chain sources noted that many gamers have been unable to purchase PS5 and Xbox consoles. Therefore, until their demands are met, there is still a wave of growth in the gaming console market, making it one of the few markets with a strong product line in the second half.
Article translated by Eifeh Strom
