The demand-induced silicon shortage may have made sourcing a GPU or AMD CPU at MSRP a miserable ordeal, but it’s had one upside: PC sales are booming. IDC reports that global shipments of “traditional” PCs — desktops, laptops, and workstations — skyrocketed 55.2 percent year on year, to a total of 84 million units.
IDC notes that the large jump this year is due to an “unusually favorable year-over-year comparison” with Q1 2020. This is true — PC sales fell 9.8 percent in Q1 2020 as shutdowns hit China — but we can always compare against Q1 2019 instead. Compared against Q1 2019, the PC market still grew from 59 to 84 million units, a 1.42x increase.
“Unfulfilled demand from the past year has carried forward into the first quarter and additional demand brought on by the pandemic has also continued to drive volume,” said Jitesh Ubrani, research manager for mobile device trackers at IDC. “However, the market continues to struggle with setbacks including component shortages and logistics issues, each of which has contributed to an increase in average selling prices.”
IDC reports that the demand boom is being driven by growth in gaming, the need for higher-performing enterprise notebooks, and an increase in demand for touchscreen-equipped systems. The analyst group believes the surge could be enough to alter the trajectory of the PC market for years to come.
All of the PC OEMs that IDC tracks reported a large jump in unit shipments year-on-year. Apple nearly doubled its unit shipments and other OEMs saw increases of 50-74 percent. Dell is very much the odd man out here — it’ll be interesting to see if the company reports any particular supply constraints on its quarterly call.
The fact that Apple doubled its unit shipments doesn’t mean much for the PC market in absolute terms, but the boom could signal sustained consumer interest in the M1. Apple may have more to say about how many x86 systems it shipped versus how many M1 chips during its next conference call. The company is quickly transitioning away from the x86 architecture, but it can’t position its x86 chips as poor options relative to the M1 or future M-class CPUs. Sales are up at every OEM, so the increase could also be attributable to that.
Chromebooks are another interesting market to watch. Chromebook adoption jumped sharply in 2020 as schools and parents bought new, inexpensive systems for remote learning. For the past 30 years, Microsoft has relied on the fact that most children learn Windows young and associate it with the concept of what a “PC” is in the first place. Defaults are powerful, psychologically speaking, and while students would undoubtedly still learn Windows, they might not learn it first. Windows 10X, Microsoft’s answer to ChromeOS, is rumored to debut later this year.
How Permanent Is the New Demand?
The big question right now is how much of this demand will continue, post-pandemic. Opinions at IDC appear to be a bit divided, in that respect. Ubrani reports pessimism in the channel, saying, “This bump in demand may be short-lived as many fear the worst is yet to come…and this could lead to both consumers and businesses tightening spending in the coming months.” But Linn Huang, IDC’s research vice president of devices and displays, added, “IDC believes there will be longstanding positive consequences once the dust settles.”
Semiconductor foundries are used to managing long-term customer demand, but the pandemic demand surge has been enormous. TSMC, Samsung, and Intel don’t want to commit to building fab capacity that won’t be needed if demand tapers off. They also don’t want to appear unresponsive to angry customers who want to see action being taken to improve fab capacity now. Managing demand without building out too much additional capacity will be a challenge for Intel, Samsung, and TSMC over the next few years.
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