Uncertain economic situation, weakening demand towards PCs in well-developed countries and hard disk drive (HDD) shortages triggered by the Thailand flood will result in a shortfall in PC shipments in the first quarter and second quarter of 2012 compared to the previous forecasts as well as will reduce the total available market (TAM) of PCs to 376 million units for the whole year, according to IHS iSuppli.
IHS predicts that worldwide PC shipments in the first quarter of 2012 will amount to 84.2 million units, compared to the earlier forecast of 88 million. The new first-quarter forecast foresees an 11.6% sequential decline from 95.3 million units in the fourth quarter of 2011. While PC shipments typically decrease in the first quarter compared to the peak holiday-selling season in the fourth quarter, the drop in 2012 will be far sharper than the 6% historical average decline.
“The PC supply chain says it has sufficient HDD inventory for the fourth quarter of 2011. However, those stockpiles will run out in the first quarter of 2012, impacting PC production during that period,” said Matthew Wilkins, senior principal analyst, compute platforms for IHS.
Total PC unit shipments in 2012 are forecast to amount to 376 million (up 6.8% from estimated shipments in 2011), compared to the previous prediction of399 million, partly due to the HDD shortage, along with weakening demand due to other factors.
The bulk in reduction in shipments will be in the notebook space, which is the area impacted by the HDD shortage. Notebook PC shipments in 2012 now are expected to rise by 10.1%, down from the previous forecast of 13.8% growth.
Starting in the first quarter of 2012, the HDD supply situation will begin to improve. It will take time, however, to replenish the supply chain, with overall HDD industry supply expected to meet demand only by the end of the third quarter of 2012. Already, the major HDD suppliers have shifted production to locations outside of Thailand, which will help ease the shortage situation.
PC shipments should rebound from the HDD shortage in the second half of the year. Still, total shipments for 2012 will fall short of previous expectations because of economic factors and rising competition from media tablets.
Ironically, the HDD market could face an inventory surplus by the end of 2012, after facilities in Thailand return to full production. When combined with the added production outside the country, the recovery in Thailand’s HDD operations could result in excess supply.