Compal, the world's second-largest notebook ODM, reported flat sales in September, traditionally a peak season for the electronics industry, indicating a lackluster notebook market.
As the second-largest notebook ODM globally after Quanta, Compal holds a 16% share of the notebook shipment market, manufacturing devices for brands like Lenovo, HP, and Dell, according to DIGITIMES Research.
The notebook supply chain lacked seasonal momentum in the latter half of 2024, prompting some component suppliers to hope for a potential demand uptick during the traditionally slow period in 2025. However, ODMs remain cautious, with most indicating that they have yet to confirm market conditions for the first quarter of 2025.
Suppliers in the notebook industry have mixed opinions about the first quarter of 2025. Some predict that the weak performance during the 2024 peak season will lead to an even slower off-season early in 2025. Others are more optimistic, suggesting that an anticipated upgrade cycle could commence as early as the first quarter, potentially lessening the traditional off-season's impact. Nevertheless, many agree that the current market outlook remains uncertain and challenging to assess.
Apple to provide limited boost thanks to the upcoming MacBook Pro
Notebook market demand continues to be sluggish, as reflected in ODMs' September shipments, which indicate a lackluster peak season, especially outside of Apple's ecosystem.
Apple is expected to unveil new MacBook Pro models equipped with the latest M4 chip in October, which could boost related component shipments. This trend is evident in the revenue reports from component manufacturers such as Jarllytec and Shin Zu Shing for September. Quanta also saw its September notebook shipments rise to 4.9 million units, reflecting a 13% increase over August.
Aside from Apple, shipments from non-Apple brands have been disappointing. Despite considerable interest in AI PCs, actual shipment volumes do not show a significant influx. This is evident in Compal's September shipments, which remained steady at 2.9 million units—unchanged from August—indicating a lack of end-of-quarter order push from customers.
ODMs are adopting a conservative outlook for the fourth quarter, largely because the third quarter has historically been a peak shipping period. Unless market sales surpass expectations, customers are unlikely to place additional orders. Given the consumption trends, the potential for increased orders appears minimal, with the fourth quarter expected to remain flat or experience single-digit declines.
Component suppliers not expecting strong notebook momentum
Amidst the prevailing caution, plastic casing manufacturer Getac Holdings and metal casing supplier Catcher Technology have recently indicated potential signs of recovery in the first half of 2025. James Huang, chairman of Getac Holdings, noted that new projects initiated by brand manufacturers could lead to improvements in the first quarter of 2025, potentially boosting notebook demand in the early part of the year.
Catcher Technology reported consolidated revenues of NT$1.463 billion (approx. US$45.51 million) in September, down 12.1% month-on-month but up 23.4% year-over-year. They attributed the recent monthly decline in revenue to specific brand clients transitioning between old and new models, anticipating a resurgence in momentum from late 2024 into early 2025.
Industry insiders suggest that the brands in question likely refer to Apple. Sources indicate that Apple's upcoming MacBook Pro, featuring the M4 processor, represents a high-end model that may drive limited shipment momentum. However, its higher price point is expected to positively influence the revenue performance of the supply chain. This scenario is similarly observed in non-Apple AI PC product lines.
Currently, AI PC products are priced relatively high, often exceeding US$1,200 and reaching up to US$1,500, resulting in lower customer demand. Suppliers hope advancements from Qualcomm, AMD, and Intel will contribute to reducing AI PC prices, thereby expanding sales volume.
Regarding the outlook for the first half of 2025, suppliers with a pessimistic view believe the off-season may weaken further. This concern arises from the conservative order forecasts projected by the two largest global brands, Lenovo and HP, for the first quarter, suggesting that shipments may fall below those of the first quarter of 2024. The anticipated upgrade wave is expected to gradually emerge only after the second quarter of 2025.
