Brand PC vendors to see shipments return to pre-pandemic levels

Monica Chen, Hsinchu; Eifeh Strom, DIGITIMES Asia 0


Brand PC vendors will see their 2022 shipments return to pre-pandemic levels due to a disappointing second half, according to industry sources.

Pandemic-stimulated PC growth has been slowing in 2022, causing PC and semiconductor supply chains to revise quarterly and monthly shipment targets and reduce orders.

PC brands such as Acer, Asustek Computer, Hewlett-Packard (HP), Dell, and Lenovo have all adjusted their 2022 shipment targets multiple times. Total annual shipments for notebook and desktop computers will return to or be slightly higher than pre-pandemic levels in 2019.

Despite anticipating that the pandemic-induced demand boom would be temporary, in 2021 and early 2022 supply chains and many research agencies were still confident in 2022 PC sales. At the time, they believed they could maintain growth even if demand slowed. However, global economic and political factors in 2022 resulted in inaccurate forecasts and a demand decline that exceeded expectations.

Intel, AMD and Nvidia were originally optimistic about growth momentum in 2022, urging supply chains and customers to expand production capacity and orders. Now, after suffering losses in the second quarter, Intel and AMD expect 2022 PC shipments to decrease 10-15% on year. Nvidia's profits have also been hit hard and its overall performance in 2022 is expected to drop significantly.

According to the PC supply chain, global end consumer demand has fallen sharply under the pressure of inflation. Inventory days and values in 2022 for both upstream and downstream supply chain companies have notably increased. Manufacturing costs and product prices have also continued to rise.

The PC supply chain confirmed the traditional second-half peak season would be slow, due to the weak consumer markets in Europe, the US, and China. Shipments of notebooks, desktops, motherboards, graphics cards, and monitors have all significantly dropped, with server growth momentum also lower than expected.

In 2021, Lenovo's total PC shipments reached roughly 81 million units. At the start of 2022, the company expected to maintain growth this year but has since revised downward its annual target to 68 million units, owing to global factors such as COVID-induced lockdowns and power cuts in China. The supply chain expects Lenovo will ship an estimated 65 million units in 2022, which is only slightly higher than in 2019, the sources said.

HP was confident at the beginning of the year that shipments in 2022 would reach 85 million units, up from 73 million in 2021. HP has already revised its target to 59 million, which is lower than the 62 million it shipped in 2019, the sources said.

Asustek shipped more than 20 million notebooks in 2021, including 2.6 million Chromebooks, two million commercial notebooks, 4.5 million gaming notebooks. Based on the rate of inventory digestion, Asustek's annual PC shipments will also fall by 10-15% in 2021. Shipments and profits from motherboard and graphics cards have also fallen, th sources said.

Acer was originally expected to ship 22 million PCs in 2022, up from 20 million in 2021, but is now expected to only ship 14 million.

PC vendors still believe there is hope that inventory digestion will be completed in first-half 2023 and annual shipments in 2023 will rebound. HP anticipates it will ship 65 million units and Asustek more than 17 million, the sources said. Apple is the only company that has maintained year-on-year shipment growth in recent years.