Shulou(Shulou.com)11/24 Report--

CTOnews.com February 21 news, Canalys today released a report that in the fourth quarter of 2022, global desktop and laptop shipments fell 29% to 65.4 million units. Given the lengthy order flow, inventory levels at channel and PC vendors should return to normal earlier than at upstream component vendors.

According to the report, based on the recent financial position of the head PC manufacturers (except Apple), HP and ASUS have started to reduce the inventory days (DoI), while the inventory days of the remaining three manufacturers (Dell, Lenovo and Acer) have increased slightly. As all vendors have taken proactive action to reduce production, inventory days are expected to improve further overall in the fourth quarter of 2022 and the first quarter of 2023, with a return to normal inventory levels expected in the second quarter of 2023.

Canalys said that among PC components, due to fierce competition and high cost of adjusting capacity, the price fluctuations of memory products and display screens are the largest, and their price trends will send important signals for the recovery of the PC market in the future.

Among them, the display screen is the first key component to see a price drop. After falling several times since the third quarter of 2021, display prices have reached cash cost levels in the third quarter of 2022. Almost all manufacturers are operating at very low capacity utilization or have significantly reduced capacity. Monthly supply chain checks show that prices have fallen modestly in recent months and are expected to stop falling by the second quarter of 2023.

In terms of memory products, DRAM and NAND flash prices dropped significantly in the second half of 2022, with declines of more than 20% in both the third and fourth quarters. This led memory manufacturers, including Kioxia and Micron, to announce significant capacity reductions in the fourth quarter of 2022, which helped memory price declines stabilize in the first quarter of 2023. Memory prices are expected to bottom out soon, after all, they have now reached cash cost levels, which will help boost OEM demand.

Recent earnings reports from LGD, Samsung and SK Hynix show very weak performance in the fourth quarter of 2022 and an even worse outlook for the first quarter of 2023, an inevitable pain in the inventory correction cycle. CTOnews.com learned from the Canalys report that following inventory revisions by PC and smartphone manufacturers, inventory levels at component manufacturers are expected to continue to rise and peak in the second quarter of 2023 before purchases pick up.

In the semiconductor foundry industry, businesses such as TSMC and Samsung have not yet entered a serious recession, thanks to a broader range of customers and products such as automobiles and high-performance computing. However, utilization of certain node processes, such as TSMC's 6/7 nm nodes, which are primarily used for smartphones and PCs, began to decline in the fourth quarter of 2022. Capacity underutilization may persist for several more quarters than for other products such as memory and displays.

At the same time, Intel and AMD reported a sharp decline in their PC CPU business, with revenue down 36% and 51%, respectively. Such a slump is unlikely to happen again, as pc makers have slashed factory production. As a result, while PC demand will decline again in the first quarter of 2023, Canalys expects the recession to slow gradually over the next few quarters.

In addition, Canalys expects component prices to rebound sharply in the second half if purchase orders flood in at the same time. With limited visibility into future demand, it is not an easy decision for procurement teams to add parts orders during the rework cycle. Manufacturers willing to "try early" in the second quarter of 2023 will be able to adapt to market demand more quickly and reduce the impact of the next component price increase trend.

reference

PC market recovery forecast for 2023

Welcome to subscribe "Shulou Technology Information " to get latest news, interesting things and hot topics in the IT industry, and controls the hottest and latest Internet news, technology news and IT industry trends.