As consumers and schools keep snapping up notebooks, component shortages are once more becoming a problem for the PC industry.
On Tuesday afternoon, HP Inc. (HPQ) - Get Report and Dell Technologies (DELL) - Get Report -- two of the world’s three biggest PC suppliers, along with Lenovo -- both disclosed on their earnings calls that they’re seeing PC component shortages.
“We exited the quarter with an elevated [PC] backlog and continue to operate with component supply shortages which are expected to constrain our growth through the first half of 2021,” said HP CEO Enrique Lores. Later, acting CFO Marie Myers added that HP’s PC growth remains constrained by “industry-wide supply shortages” of CPUs and display panels.
Likewise, Dell COO Jeff Clarke said his firm is dealing with LCD-related shortages -- both for LCD panels and chips such as timing controllers and display drivers.
The remarks come as both HP and Dell, as well as many peers, continue seeing strong notebook demand fueled by remote work and learning activity. This growth is helping offset desktop weakness caused by lower corporate demand.
HP reported that its PC unit sales rose 7% annually, with notebooks rising 25% and desktops dropping 31%. The company added that its “premium” consumer PC revenue rose 29%, and that its sales of Chromebooks more than doubled.
Dell reported that its Client Solutions Group (CSG) saw 14% consumer revenue growth and (with the help of strong orders from education and government clients) 5% commercial growth. Double-digit revenue growth was reported for Dell’s Latitude and Precision notebook lines, and “strong double-digit” growth was reported for Dell’s high-end XPS notebooks and Alienware gaming PC unit.
Ahead of HP and Dell’s reports, there were already some signs that PC component shortages were becoming a bigger problem ahead of the holiday season. Last week, Terry Gou, the chairman of contract manufacturing giant Foxconn, forecast that chip shortages would remain a near-term problem for his company due to high notebook and gaming PC demand.
In addition, AMD (AMD) - Get Report has reported seeing tight chip wafer supplies, as foundry partner Taiwan Semiconductor (TSM) - Get Report contends with elevated demand from many big clients. And Tim Cook mentioned on Apple’s (AAPL) - Get Report Oct. 29 earnings call that sales of Macs (along with iPads and Apple Watches) remained supply-constrained.
Intel (INTC) - Get Report, for its part, struck a positive tone on its Oct. 22 earnings call about its PC CPU supplies. However, the chip giant has frequently seen PC CPU supply constraints over the last two years, particularly for low-end CPUs.
In recent months, shortages have been especially pronounced for high-end PC gaming hardware. Nvidia’s (NVDA) - Get Report new RTX 30 series desktop GPUs and AMD’s new RX 6000 series desktop GPUs both remain out of stock at major retailers, and are selling for major aftermarket premiums.