Connect with us

Headlines Of The Day

Pandemic sales boom sputters for PCs, smartphones

Red-hot demand for smartphones and personal computers spurred by homebound consumers during the pandemic appears to be losing steam, with China seeing a particularly pronounced slowdown.

Global shipments of smartphones and PCs fell in January-March, with Xiaomi, the leading Chinese smartphone supplier, tumbling to a net loss for the period. Major contract manufacturers of electronic equipment saw sales decline in April.

Even the semiconductors sector, which continues to enjoy strong demand, is sensing a shift.

“The end markets for smartphones, PCs, tablets and other goods appear to be turning soft,” said C.C. Wei, CEO of Taiwan Semiconductor Manufacturing Co., in an April earnings call.

Global shipments of smartphones fell 8% on the year in the first three months of 2022, according to estimates by Hong Kong-based research company Counterpoint. Full-year shipments for 2022 are expected to decline 3% to 1.35 billion units.

Particularly noticeable is the slowdown in China, which accounts for a little over 20% of shipments.

Xiaomi saw a 22% year-on-year decline in smartphone shipments in the January-March period. Sales fell below the previous year’s level for the first time since it went public, sending the company to a net loss of 587 million yuan ($88 million).

China’s city lockdowns to combat the coronavirus spread cooled consumer sentiment significantly. April sales were down 22% on the year, according to research company CINNO.

The same is true for PCs and TVs, which have benefited greatly from stay-at-home demand. Global shipments of PCs fell 5.5% to 78.91 million units in January-March, according to consulting company Gartner. In addition to declining sales of “Chromebooks,” which have limited performance capabilities, the company sees spending being diverted to things other than devices.

“We expect the personal computer market to contract slightly for the full year,” said Hu Shubin, co-CEO of Asus, a leading personal computer supplier.

Global shipments of televisions in January-March declined 20% from October-December 2021, according to Taiwan market researcher TrendForce. As prices begin to rise worldwide, consumers with limited incomes are buying less nonessential goods.

There are also signs of change in the supply chain for electronics products. Major contract manufacturers such as Pegatron and Compal Electronics in Taiwan have been building up inventories to meet demand, but sales have been slowing. At the end of March, the inventory of Taiwan’s five largest companies was equivalent to two months of average monthly sales in the January-March period, an increase of nearly 10 days in March from the same period in the past.

In addition, the supply chain has been disrupted by China’s city lockdowns. A major Taiwanese contract manufacturer was unable to produce and ship products as planned due to limited operations at its factories in China. April sales were down 19% on the year for Pegatron and 40% for Compal. If the supply chain disruption originating in China continues, the cost of missing out on potential demand will be significant.

Smartphones and PCs account for an estimated 40% of total demand for semiconductors. While chip demand for automobiles, industrial equipment, and data centers remains strong, a slowdown in consumer electronics products would be a headwind for the industry.

“The order backlog is growing, but we are not sure if that’s linked to end demand,” said Hidetoshi Shibata, president of Renesas Electronics.

The company will try to reduce the inventory held by its sales network, mainly for personal computers, in the April-June period.

Global inflation is exacerbating concerns about the demand slowdown. If the supply chain constraints become protracted, it could depress the earnings of consumer electronics companies. Nikkei.Asia

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2022 TV Veopar Journal