Years of slumping business for Taiwan’s PC industry may be over, analysts said last week, after global chip giant Intel Corp said on Thursday that stronger-than-expected corporate PC demand would boost its revenue in the current quarter.
Intel said that sales would be about US$13.4 billion to US$14.0 billion this quarter, 5 percent higher than its previous estimates. The company also said it expects some revenue growth for the year, compared with its previous expectations of flat revenue.
“This is a continuation of the positive data on PC demand that have started to come through in the past few weeks,” JPMorgan Securities Ltd analysts led by Gokul Hariharan said in a client note on Friday.
“PC demand doesn’t appear to be collapsing even after Windows XP support expired in April,” the analysts said.
Moreover, withdrawal of smaller brands such as Samsung Electronics Co and Sony Corp from various PC segments is still continuing, which should help leading vendors such as Lenovo Group Ltd (聯想) and Hewlett-Packard Co (HP) consolidate the market going forward, JPMorgan said.
Intel’s positive guidance follows similar recent messages from Dell Inc and HP in the US and major notebook computer makers in Taiwan.
The International Data Corp (IDC) has projected global PC shipments would decline 6 percent this year, but the decline was not as steep as the 10 percent fall last year.
Last week, Dell announced its financial results for the three months ended on April 30, showing revenue growth of 4 percent quarter-on-quarter to US$14.7 billion, aided by a 19 percent sales increase in desktop PCs and a 10 percent rise in notebook computer sales. Commentary from HP also suggests that some markets such as Japan and the US are seeing the start of a commercial PC replacement cycle.
In Taiwan, total notebook computer shipments from five major contract makers advanced 14.6 percent last month from April, led by Quanta Computer Inc (廣達) and Compal Electronics Inc (仁寶), following a monthly decline of 12.1 percent in the previous month.
Much of the PC shipment gains are a result of Microsoft ending its support for Windows XP, forcing businesses to refresh their machines or face security concerns, analysts said.
Consumer demand has also shown signs of stabilization in the wake of rising orders for 2-in-1 hybrid notebooks and Google Inc’s Chromebook computers, they added, citing Microsoft’s decision to lower the Windows licensing fees and Google intention to penetrate the PC segment.
In addition, the impact from tablet computers is easing. Last month, IDC cut its global tablet shipment forecast to a growth rate of 12.1 percent year-on-year, which is notably less than the 51.8 percent growth last year.
“The consumer PC decline is moderating since tablet growth is also peaking. Until we see new functionality emerging in tablets, we believe that demand for notebooks and tablets have reached an equilibrium for now,” JPMorgan analysts said.
Looking ahead, CIMB Securities Ltd analysts Wang Wanli (王萬里) and Felix Pan said the catalyst for the PC industry in the second half of the year would come from 2-in-1 hybrid notebooks and Chromebook in the consumer segment.
In their note on Friday, Wang and Pan raised their forecasts for global desktop PC shipments this year to a 2.3 percent decline from a 5.3 percent decline and notebook shipments to an annual 1.4 percent drop from a 3.7 percent drop.
Kirk Yang (楊應超) and his colleagues at Barclays Capital Securities Corp last week also raised their shipment forecasts for this quarter, predicting notebook shipments would grow 8 percent quarter-on-quarter and desktop PC shipments increase 4 percent from last quarter.
Based on the signs of recovery in the PC industry in the first half, Barclays is positive on Asustek Computer Inc (華碩) and Compal as the two companies set to benefit from the growth in notebook computer shipments and the rising demand of smart devices.
CIMB believes Asustek would outperform its peers in the near future because of its high exposure in hybrid notebooks and Chromebooks, while JPMorgan is upbeat about Quanta, Compal and Lenovo for their market share gains or growth from non-PC segments.