Total shipments of notebook computers from Taiwanese contract producers might have peaked in the past quarter, and could be followed by a sequential decline this quarter, CIMB Securities Ltd said.
Overall, the nation’s top five notebook original design manufacturers (ODMs) — Quanta Computer Inc (廣達), Compal Electronics Inc (仁寶), Wistron Corp (緯創), Inventec Corp (英業達) and Pegatron Corp (和碩) — could see shipments increase 8 percent in the third quarter from the second quarter, but register a sequential decline of 1.6 percent this quarter, the Hong Kong-based brokerage said in a client note issued on Thursday.
“The inventory buildup for back-to-school [sales], China’s Golden Week and the Christmas season is almost over,” CIMB analysts Wang Wanli (王萬里) and Mike Yang wrote.
While the shipment contraction for this quarter could also be due to a higher comparison base last quarter, notebook sales do face some headwinds this quarter, as consumer spending appears restrained and demand in the corporate segment is weakening, the analysts said.
“In our view, it will be difficult for PC vendors to push sales of Chromebooks and Windows notebooks in the fourth quarter, because consumers’ budgets would be tied up by the new iPhone 6 and iPhone 6 Plus,” they wrote. “In the corporate segment, the fourth quarter is seasonally slower, due to limited catalysts.”
JPMorgan Securities Ltd also predicted overall shipments by Taiwanese notebook ODMs would decline by 3 percent this quarter from last quarter, as the notebook market is set to face short-term turbulence.
However, PC demand should still stay relatively flat heading into the first half of next year, the US brokerage said, citing the fading impact of market cannibalization by both tablet PCs and smartphones.
In addition, lingering corporate demand and new products — such as sub-US$299 Windows 8 notebooks and two-in-one models taking advantage of Intel’s Core-M design — should help support PC demand into next year, JPMorgan analysts led by Gokul Hariharan said in a note on Monday.
“Apple’s larger-sized iPad (12.9-inch screen) is the key risk and could trigger a decline in notebook demand again from the second half of 2015,” they wrote.
Among Taiwanese notebook ODMs, Quanta could report the highest quarterly growth with a rise of 15.7 percent in shipments last quarter, due to more orders from Apple Inc and Asustek Computer Inc (華碩), according to CIMB’s estimates.
CIMB also forecast Compal would see notebook shipments increase 8.5 percent last quarter and 10 percent growth for Wistron.
However, Pegatron is expected to report the largest quarterly decline with a drop of 20 percent last quarter in shipments among the top five ODMs, following a 7 percent decline in the second quarter, CIMB said.
CIMB said Pegatron’s ODM focus has changed and thus its share in notebook assembly keeps shrinking, while JPMorgan said the company’s notebook business could slip into losses next year amid further shipment decline, accelerated by Toshiba Corp’s PC business restructuring.
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