Worldwide notebook computer shipments will post better-than-expected figures in the second quarter of this year thanks to launches of new chips and ultra-thin laptops, as well as a recovery in hard drive disk supply, a British investment bank predicted.
After three consecutive quarters of lower-than-average seasonal shipments, Barclays Capital is looking for personal computer shipments to beat seasonal expectations for the first time in four quarters.
The bank expects notebook shipments from top-tier Taiwanese original design manufacturers (ODMs) to grow 8 percent in the second quarter of this year and hit 39.8 million units, better than the seasonal average of 6 percent growth.
The top five ODMs are Quanta Computer Inc (廣達), Compal Electronics Inc (仁寶), Wistron Corp (緯創), Inventec Corp (英業達) and Pegatron Corp (和碩), and they account for about 90 percent of global notebook shipments.
“We believe most of the shipment upside is due to channel inventory refilling for Intel Corp’s new Ivy Bridge chips and the next generation of Ultrabook launches, combined with hard drive disk price declines from better supply availability,” said Kirk Yang (楊應超), head of Asia ex-Japan tech hardware research at Barclays Bank, Hong Kong.
“However, the recent change of Chongqing’s leadership in China could bring significant uncertainties for this new western China manufacturing center in terms of the new government’s commitment and future financial incentives for notebook ODMs,” he wrote in a report to clients on Tuesday.
Over the past several quarters, notebook ODMs have been aggressively trying to diversify to non-notebook products, such as LCD TVs, servers, tablet PCs and smartphones, to mitigate the impact from weakening demand for notebooks, Yang said.
However, Yang believes that only Quanta has demonstrated the capability to both diversify away from notebooks and maintain profitability at the same time.
According to Barclays’ report, Compal still has close to 80 percent revenue exposure to notebooks and has seen its operating margin drop to its lowest point over the past 16 quarters, while Wistron still has 60 percent revenue exposure to notebooks with LCD TV shipments turning increasingly weaker.
Pegatron derives 60 percent of its revenue from its cloud computing business, but its margin on notebooks is just above break-even point, while Inventec still has 70 to 75 percent revenue from notebooks and it continues to see sluggish margins, the report said.