PC demand, shipments remain high with Covid despite chip shortages

Even as the chip shortage continues to curtail some vehicle assembly, the PC market is surging ahead with shipments expected to grow by 18% for all of 2021.

IDC recently said total shipments will reach 357 million units this year, but then drop by nearly 3% next year. Even so, the overall five-year annual growth rate will remain positive at 3%.

The pandemic drove a huge uptick in work and school from home usage to help drive demand.

A variety of analysts have confirmed that chips are in short supply for vehicles, but even PCs have been affected to a degree. Jitesh Ubrani, research manager at IDC, said some buyers will have to settle for desktops instead of laptops as the urgency of demand for any kind of PC remains “quite high.” PCs have been affected with shortages in notebook panel driver chips, audio codes, sensors and power management chips.

More broadly, the electronics parts in short supply include auto integrated circuits, sensors, PMICs, and display drivers which use 40 nm or older nodes. These older nodes make up more than half of all capacity in the chip industry, while suppliers are “only gradually increasing capacity as they prioritize on the largest segments of their business and invest more on mainstream and leading-edge nodes,” said Mario Morales, program vice president of semiconductors at IDC.

IDC believes the shortage will ease by the end of September, but the industry will come into broader balance in the first half of 2022.

Despite the 18% growth in shipments for all of 2021, all the major segments of the PC market (consumer, education and commercial) remain in “desperate need of inventory.” 

Demand for PCs remains high, and supply remains constrained, IDC said.

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In a separate report, IDC said smartphone demand will be higher for 2021 than earlier expected, reaching 1.37 billion smartphones, up from a prediction of 1.35 billion. The demand is driven by interest in 5G phones, which are seeing some price declines at least on the Android side.

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IDC also said that volumes of smartwatches and other wearable devices dropped in the first quarter of 2021 compared to the record levels set in the fourth quarter. Shipments reached 153 million in fourth quarter, but dropped dramatically to 104 million in first quarter, a normally slower quarter.  Still, the first quarter shipments were up by 35% over a year earlier.

IDC said the smaller companies fueled the year-over-year growth in wearables.  Apple was the top vendor in first quarter, partly for its less expensive SE and Series 3 smartwatches.  Apple was followed by Samsung, Xiaomi, Huawei and India-based BoAt. Included in the wearables category are smartwatches and fitness bands, but also wearable patches, rings, audio glasses, and hearables.