Upstream component makers are turning conservative about notebook demand in 2022, despite their downstream brand clients' optimism, according to sources from the upstream supply chain.
Component makers are usually more cautious as they cannot survive dramatic market changes as easily as their brand clients, and they have often seen brand clients cut orders without any warning.
Several component makers have seen inventory levels go up because of their brand clients cutting order for Chromebooks, demand for which decelerated significantly in the second quarter.
However, a new round of education procurement orders from the US is expected to be activated at the end of the third quarter or the beginning of the fourth quarter, and Japan's education procurement orders for local high schools are also expected to begin in the fourth quarter. These new orders are expected to help component makers digest their inventory for Chromebooks.
Hewlett-Packard (HP) was rather optimistic about its 2021 shipments earlier this year and expected its overall notebook shipments to come to 80 million units in 2021 and Chromebooks to reach 50-60 million units. However, it is now unlikely to achieve these numbers.
Digitimes Research's figures show HP's 2020 notebook shipments arrived at 51.71 million units and will grow 15% on year to 59.77 million units in 2021. Although it is not much worse than the 18% on-year growth of the global average, the volumes are still far smaller than HP's original expectation of 80 million units.
In addition, some brand vendors reportedly have canceled orders for T2-level chassis molds for notebooks, raising concerns among upstream component makers about whether the notebook market may decelerate in 2022, as canceling chassis mold orders has rarely happened, the industry sources said.
However, brand vendors are currently still experiencing component shortages, which are unlikely to ease before the end of 2021.
ODMs are also optimistic about the notebook market in 2022 with Compal Electronics expecting overall 2022 shipments to have a chance to enjoy a single-digit on-year increase. However, most component makers expect a single-digit or double-digit decline in shipments.
