• Global PC shipments grew 45% YoY in Q1 2021 on solid demand and a low base in the same period in 2020 due to COVID-19.
• Shortages of key IC components will continue to affect the shipment schedules of PC brands and ODMs.

The recovery reported by the PC market in H2 2020 gained momentum in H1 2021. Global PC shipments grew 45% YoY to 75.6 million in Q1 2021 thanks to robust demand across different categories and a low base in the same period last year due to the COVID-19 outbreak. However, PC shipment volumes were down 14% sequentially from Q4 2020 due to seasonality.

With a 24% market share, Lenovo took the first place again in Q1 2021, followed by HP at 23% and Dell at 17%. The overall momentum of the PC market was mainly driven by the growth in gaming notebooks and surging demand from the work-from-home and study-from-home segments, which stimulated Chromebook sales.

Global PC Shipments by Vendor, Q1 2021 (units in million)

In Q2 2021, PC shipments will remain resilient with the pent-up demand from Q1 2021 extending to this quarter. We believe the top six vendors will continue to dominate the market with over 85% share.

Stepping into H2 2021, the momentum from the previous half will continue and reach a peak with back-to-school (some will be virtual classes) demand as well as the pent-up demand from H1 2021. Premium models with higher ASPs could take the lead via big promotions, which may squeeze out Chromebook’s market share in H2 to some extent. In all, we predict a 16.3% YoY growth in 2021, with global shipments reaching 333 million.

Lead time will ease only in late H1 2022

On the other hand, our checks suggest ODMs’ component inventory levels are relatively higher. But they are still facing shortages of key components like power management IC, display driver IC (with display panel) and CPUs. We have found a 20%-30% gap between orders (end-demand) and actual shipments (supply), largely owing to the component shortage beginning H2 2020.

Lead Time (weeks) for Key Components in PC/Notebook Segments

PMIC and DDIC have faced the biggest gaps in the PC segment, with the lead time almost two times more than the normal before the COVID-19 outbreak. For PC CPUs, it was gently improving in late H1 in several sub-segment products. Some vendors also said the demand for audio codec IC and LAN chip remained unsatisfied and would continue to remain so in the second half of this year. WiFi SoC has also faced relatively low inventory levels, which will prove to be a drag on 2021 global PC shipments.

Since we do not see any meaningful foundry capacity expansion in H2 2021, it is unlikely that the lead time for key IC components would recover from the current status. Therefore, PC brands and ODMs cannot fully solve the shortage issue and clear the orders backlog. We expect the demand-supply gap to gradually normalize in late H1 2022.