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PC Oversupply to Soon hit Market Warns Acer

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COVID Business and individual demand for desktops and laptops have soared, prompting PC manufacturers to struggle to build enough PCs and obtain adequate components. PC demand has slowed due to inflation and the uncertainty produced by the Ukraine situation, even if retail shelves are mostly supplied. As a result, Acer Chairman Jason Chen predicted a notebook shortage earlier this week.

As a result of rising energy, food, and other basic product prices, global inflation rates have reached new highs. As a result, many people are reconsidering their shopping habits and cutting back on their technological usage. Client PC sales in the consumer sector have not been particularly strong in recent months, according to DigiTimes. Acer, Asus, and HP have all recently declared decreasing demand and weak consumer market performance.

In the second quarter of 2022, HP’s commercial PC sales climbed by 18% year over year, while consumer systems sales declined by 6%. Year over year increased prices and better sales of premium systems resulted in a 3% increase in notebook revenue, a 28% increase in desktop revenue, and a 21% increase in workstation sales.

According to IDC, softening consumer PC demand would reduce PC shipments by 8.2 percent in 2022 compared to the previous year

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Computer shipments peaked at 348.8 million units in 2021, but are likely to fall to 321.2 million units this year. Since demand began to exceed supply in Q2 2020, PC manufacturers have been working feverishly to purchase components and build up stocks to meet demand. Leading PC makers like Acer, Dell, and HP bought chips directly from developers and manufacturers and stockpiled them to avoid supply chain disruptions.

Stockpiles are becoming liabilities as oversupply leads to price reductions, which is excellent for consumers but bad for businesses, now that consumer PC demand is dropping (albeit not to pre-pandemic levels). According to reports, Acer’s chairman indicated that supply had already surpassed demand for laptops.

Companies that market to customers, such as Acer, Asus, Gigabyte, and MSI, would be impacted by the slowing demand. This is particularly true for PCs in the entry-level and mid-range price ranges. According to DigiTimes, the inventory value of Acer, Asus, MSI, and Gigabyte climbed by 26.59 percent, 79.51 percent, 77.62 percent, and 64.59 percent, respectively, year over year, based on first-quarter balance sheets. If demand was high, inventory accumulation would be profitable, but now that demand is low, inventory accumulation could result in losses because some components and finished commodities lose value quickly.

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However, not all PC manufacturers are harmed by declining demand or worried about market overstock. You won’t get a MacBook Pro 14/16 from Apple until August if you order one now (in the US or Europe). The systems, on the other hand, are only offered at a few Apple outlets.

Also Read:
AMD brings its FidelityFX Super Resolution 2.0 to 16 more PC Games

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Nivedita Bangari
Nivedita Bangari
I am a software engineer by profession and technology is my love, learning and playing with new technologies is my passion.

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