According to the China Times, many PC OEMs, including companies such as Acer, ASUS and MSI, have huge stocks of finished systems in their warehouses. The reason for this was low consumer demand. PC and laptop ODMs, including HP, Dell, Apple and others, have faced similar problems.
Image Source: ASUS
ASUS and Quanta suffer the most from overcrowded warehouses. Among OEMs, ASUS is doing the worst. In total, its inventory is estimated at about $6.8 billion, up 60% from last year. Quanta has about $8.4 billion worth of unsold products, up nearly 55% from last year. Along with Compal, Inventec and Wistron inventory, there is approximately $32.30 billion worth of goods released in the second quarter of this year in warehouses.
As noted, at the same ASUS, half of the stocks in warehouses are finished products. The other half are chips and various PC components. It is estimated that part of these reserves should be sold in the next quarter (or quarters). Otherwise, these goods will lose their value. However, ASUS itself says that they can actually use about 80-90% of the stock of chips and other components for the production of a new generation of products and PCs. It is planned to do this before the end of this year.
Aggressive stock-cleaning measures like the ones ASUS is talking about could work in the hands of the average consumer. According to China Times, in order to clear the accumulated stocks of products faster, “most manufacturers plan to hold various consumer promotions and provide discounts on their products“. True, the financial performance of these companies for the third and fourth quarters of this year will also suffer from this. But it’s better than being left with unsold stocks.
The aforementioned problems of producers arose against the backdrop of fears of a very likely recession in the global economy. More recently, at the peak of the pandemic, the demand for PCs and entertainment systems exceeded the number of available offers due to the shortage of some components, problems in logistics, as well as the cryptocurrency boom in the case of video cards. Now the supply and demand curve is rapidly rolling back against the backdrop of the collapse of the cryptocurrency market, the energy crisis and the situation in Ukraine.
If you notice an error, select it with the mouse and press CTRL + ENTER.