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Ongoing chip shortage hampers PC market growth

Year-on-year growth slowed from 35.7% in Q1 to 4.6% in Q2 with analysts blaming the semiconductor crisis

The pace of growth in worldwide PC shipments has slowed to just 4.6% year-on-year for the second quarter of 2021 following record-setting year-on-year growth of 35.7% for the first three months of the year.

The global semiconductor shortage is in part to blame for this slowdown, according to Gartner, which reports that 71.6 million units shipped in the second quarter of 2021 - up from 68.5 million in the second quarter of last year.

Although PC demand remained above pre-pandemic levels, this represents a marked deceleration against the rate of growth in the first quarter of 2021. 

“The global semiconductor shortage and subsequent component supply constraints have extended lead time for some enterprise mobile PC models to as long as 120 days,” said research director at Gartner, Mikako Kitagawa, explaining the slowdown. 

“This has led to prices increasing in the bill of materials, which vendors have passed on to end-users. Moving forward, rising prices could continue to slow PC demand through the next 6 to 12 months.”

The market had, in fact, been surging ever since the middle of last year, with the third quarter of 2020 as well as the final three months of the year witnessing strong year-on-year growth. For 2020 as a whole, PC shipments rose by 11%, according to Canalys data.

The surge in PC shipments was also reflected in the tablet market, attributable to the surge in remote working, which boosted demand for devices across the world. 

With that temporary effect lifted, and many businesses settling into their remote work and hybrid working patterns, the semiconductor shortage has begun to catch up on the industry. 

The global chip shortage, which is now a prolonged crisis, has been increasingly affecting many industries over the last few months. The automotive industry alone, for example, is set to lose $110 billion during 2021 as the chips that power nearly all modern cars’ functionality continue to be unavailable. 

IBM president Jim Whitehurst suggested recently that the shortage could last up to two years, and that the industry might need to look into recycling or extending the lifespan of certain computing technologies.

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Meanwhile, Lenovo remains the manufacturer with the most PC shipments and a 24.1% market share, followed by HP, with 20% and Dell with 17.1%. 

Apple sustained the greatest year-on-year growth in PC shipments, surging 19.7% from 5.1 million to 6.1 million units. The only manufacturer that suffered a decline in shipments was HP, which shipped 23.5 million units last year and 20 million in the second quarter of 2021. 

Although the global market grew by 4.6%, this masked a year-on-year decline in PC shipments by 1.9% in the EMEA market. Gartner’s Kitagawa suggested that after an unprecedented peak in 2020, this past quarter saw the market “readjusting to new norms in shipments, inventory and demand”. 

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