The rising PC market is being pushed down the earth by supply chain problems

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The semiconductor market is booming. Intel, AMD, Nvidia and their affiliates are all seeing huge gains, but actual PC shipments in North America declined in the third quarter of 2021 while global sales grew only five percent.

In a market as mature as personal computers, five percent growth would normally be a great result, but these are not common times. The ongoing pandemic shortage could explain at least part of the decline in the US, though the shift away from remote working and schooling accounts for the rest.

“Supply chain bottlenecks and persistent logistical challenges led the US PC market into its first quarter, with shipments declining annually since the start of the pandemic,” said Neha Mahajan, senior research analyst, devices and displays at IDC. “After a year of accelerated purchases driven by the shift to remote working and learning, there has also been a comparative slowdown in PC spending, causing some slowdown in the US PC market today. Nevertheless, the supply in key segments remains significantly behind the demand, as the stocks are still below the normal level. “

Despite this slowdown in growth, the average annual growth rate of the PC market has reached 9 percent since the third quarter of 2019. According to Canalys, which reports that both desktop and laptop shipments have increased year over year, but the market continues to be predominantly laptops. Shipments of notebooks and mobile workstations rose year-on-year by 3 percent to 67.4 million units, while shipments of desktops rose by 12 percent to 16.6 million units. The desktop market has largely shrunk and includes PC games, workstations, and low-end systems. During the pandemic, total shipments toward laptops soared, thanks in no small part to the overwhelming popularity of Chromebooks.

The question of what the long-term future of the PC market looks like varies depending on who you ask. Companies like Intel, AMD and Nvidia are optimistic about the prospects for long-term demand, while analysts are more pessimistic. While no one anticipates the pandemic-era growth will continue in the long term, the question arises whether the market will remain as active as it is now or whether consumers will move away from PCs and back to other devices in the long term.

In addition, according to Canalys, nobody should expect the current situation in the supply chain to improve in the foreseeable future. The analyst states: “The shortage of PCs is expected to last well into 2022, with a significant proportion of orders not being fulfilled over the Christmas period of this year. Vendors able to handle this phase of operational upheaval by diversifying production and sales and having a better view of orders to prioritize device allocation will be equipped to weather the storm. “

Shipments declined in countries like the United States, Canada and Japan, but those declines were offset by strong growth in Latin America, EMEA and Asia-Pacific excluding Japan, where shipments rose 17 percent, 16 percent and 13 percent, respectively.

Much seems to depend on what happens to the Chromebook market over the next year. Chromebook demand has been a huge part of the growth of the PC market during the pandemic. So whether or not it declines likely depends on what the long-term demand for Google’s platform looks like. This, in turn, could be influenced by how countries around the world continue to deal with the pandemic. Intel, TSMC and Samsung have committed to aggressive capacity expansion plans over the next few years, signaling where they think the market will head.

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