HP


2022-02-24

Notebook Panel Shipments Hit Record High 282 million in 2021, Potential Risk of Correction in 1H22, Says TrendForce

In 2021, notebook panel shipments reached a record high of 282 million units, with an annual growth rate of 25.1%, according to TrendForce’s research. In the first half of the year, demand was driven by the pandemic and primarily focused on consumer notebooks and Chromebooks while, in the second half of the year, as Europe and the United States gradually lifted lockdowns and work returned to normal, demand largely shifted to commercial models, which continued to support the demand for notebook panels throughout the year.

It is worth noting that TrendForce believes shipment totals of notebook panels from 1Q22 to 2Q22 may be corrected. Notebook panel shipments in 1Q22 are estimated at approximately 67.9 million units, a QoQ decline of 9.7% while 2Q22 shipments are expected to drop to 61.4 million units, down 9.5% QoQ. In addition to the impact of the traditional off-season, there are two reasons for this correction. One is that inventory on the brand-side has increased. Due to the shortage of panels in the past two years, the brand-side continued to purchase panels in 2021 to avoid supply chain disruption. Normally, notebook brands hold 4 to 8 weeks of inventory but some brands have already stocked up to 8 weeks. Two, since a whole notebook requires numerous components, it cannot be assembled and shipped if even one is missing. Limitations impose by incomplete materials lists caused the growth rate of notebook computer shipments to fall behind that of panel shipments, shifting notebook computer panels into oversupply.

Despite this, TrendForce has specifically mentioned, since the profit margin of notebook panels still beats LCD monitor panels and TV panels, panel makers will still desire an increase in the supply of notebook panels. However, in the face of a possible correction in notebook panel shipments, panel makers may accumulate more inventory and deepen the downward pressure on notebook panel pricing.

Looking forward to 2022, panel shipment performance and price trends will be adversely affected by adjustments in notebook brand inventories in 1H22. In 2H22, notebook brands will continue to focus on sales plans for whole notebook computers. The sales performance of these brands during the peak season is still worth looking forward to and the restocking momentum of notebook panels is expected to recover. Current estimates put the shipment of notebook panels at 265 million in 2022, a decrease of 6.0% YoY.

2022-01-14

Effects of Stay-at-Home Economy Retreat, Shipments of Notebooks in 2022 Expected to Reach 238 Million Units, Says TrendForce

Due to the pandemic, laptops shipments reached a record high of 240 million units in 2021, according to TrendForce‘s investigations. However, the market has been abuzz recently and, as the global population of the fully vaccinated has exceeded 50%, relevant demand driven by the pandemic is expected to gradually weaken. Shipment volume will decrease by 3.3% year-on-year, revised down slightly to 238 million units. Chromebooks will account for approximately 12.3% of shipment volume, though it accounted for approximately 15.2% in 2021. The momentum of shipments has slowed down significantly which indicates that demand derived from the economic effect of remote working and teaching has subsided.

TrendForce further states that Chromebook shipments declined sharply by nearly 50% in 2H21 due to the end of the Japanese government’s education tender and an increase in U.S. market share. However, thanks to the sequential return to the office of European and American companies driving a wave of commercial equipment replacement, shipments of commercial laptops have grown rapidly to make up for the shortfall. In turn, the shipment of laptops in 4Q21 hit the highest levels of the year, reaching 64.6 million units. In addition, due to the severe shortage of IC materials in mature processes, the backlog of orders extends to 1Q22 and the off-season is expected to be short. Compared with the average quarterly reduction of 15% in previous years, this year’s pullback is expected to be less than 10%.

It is worth noting that due to the shortage of container ships and issues with port congestion, shipping time has been prolonged, increasing by two to three times from manufacturers in mainland China to the United States compared to before the epidemic. Notebook brands have all been shipping in advance and the proportion of air freight shipments has increased. However, shipping time still exceeds expectations, which may flood the supply chain with duplicate orders from downstream customers, resulting in overstocked inventories and the risk of subsequent orders being canceled. In addition, the wave of commercial equipment replacement driven by a return to the office will be a major variable that will affect the demand for notebooks in 2022, resulting in near-term buzz in the market.

TrendForce indicated that in the past, due to factors such as fewer working days during the Lunar New Year Holiday and labor shortages in mainland China, brands would often require large OEMs to produce and ship before the Lunar New Year. This first quarter end-of-season surge will start from this month. Even though changes in end-user demand is unclear, March will see the beginning of a production surge to end the first quarter. If there is a major change in demand at that time, it may lead to an accumulation of distribution channel inventory, leading to a downward revision in demand, and a return to the normal equipment replacement cycle.

2021-12-29

Non-Apple notebook manufacturers still unlikely adopt Mini LED displays while SDC aggressively ventures into notebook display market with OLED panels

Despite their similar physical dimensions, notebook panels and tablet panels entail drastically different market conditions. Being two of the strongest performers in the relatively oligopolistic tablet market, Apple and Samsung collectively possess a nearly 60% market share, thereby forcing other brands to adopt a relatively passive strategy that prioritizes conserving market share over adopting emerging technologies. In contrast, the notebook computer market has remained competitive throughout the years, with market leaders HP, Lenovo, and Dell holding the absolute advantage in the commercial notebook segment. Even so, Acer and Asus still enjoy some degree of dominance in the consumer segment, not to mention the fact that Apple has carved a niche market of its own thanks to the absolute differentiation of MacBooks from the rest of the field.

With greater diversity of brands comes greater competition in the market. As such, companies must now continue to refresh their product specs and product ranges in order to stay competitive. In this regard, Mini LED products would appear to be likelier to see adoption in the notebook computer market than in the tablet market. It should be pointed out that SDC (Samsung Display Co.) holds the sole patent for OLED tablet panels – the main competitor of display solutions featuring Mini LED backlights and LCD panels. Although SDC is still figuring out its medium- and long-term strategies in the tablet market, it has been relatively aggressive in capturing share in the notebook market. For instance, SDC’s OLED notebook panels have been gradually cannibalizing market shares from LCD notebook panels since 2021. To date, more than four million notebook computers featuring Samsung’s OLED panels have been shipped, accounting for a nearly 2% market share. In addition, almost all mainstream notebook brands have started carrying their respective lineup of OLED notebooks.

The meteoric rise of OLED models in the notebook market this year can primarily be attributed to SDC, which is the sole supplier of OLED notebook panels. Whereas SDC previously allocated most of its production capacity for OLED (Rigid OLED) panels to smartphone displays, the successive ramp-up of Gen 6 production lines for OLED (Flexible OLED) panels in China has resulted in a hypercompetitive market with plummeting quotes that both placed significant downward pressure on the existing price band of rigid OLED panels and negatively affected demand for rigid OLED panels. Given that the aforementioned factors are unlikely to reverse course, SDC has therefore decided to reallocate their production capacity for rigid OLED panels from smartphone displays to notebook displays instead, since the former has continued to decline as an added value while the latter appears to have much more potential for growth.

Incidentally, SDC has spent considerable time cultivating its presence in the notebook computer market. The company formerly positioned its OLED solutions exclusively in the flagship market segment, with UHD/4K being the only resolution available on its OLED notebook panels. The adoption of these products was lukewarm at best due to OLED panels’ prohibitive prices and the very limited target audience for UHD models. Moving to 2020, however, SDC adopted a more ambitious approach to the notebook market and subsequently released a host of OLED panels featuring Full HD resolution in accordance with the mainstream market’s demands. By doing so, SDC was able to not only substantially lower its OLED notebook panel quotes, but also align its products with the enormous total addressable market of mainstream notebook consumers, in turn skyrocketing notebook brands’ willingness to adopt OLED panels.

Not only have OLED displays enjoyed a longstanding presence in the high-end smartphone and TV segments, but most consumers also generally understand that OLED panels are superior to traditional LCD panels with respect to such specifications as color saturation, contrast levels, and even physical thickness. For notebook computer brands, adopting OLED panels in their displays allows said brands to cut down on costs that would otherwise have to be spent on either educating the average consumer on popular science topics related to display technology or marketing the brands’ display solutions, as OLED displays’ superior specs are already widely known. That is why almost all mainstream brands, ranging from Asus to HP and Dell, have released OLED-equipped notebook computers, some of which even boast consumer-oriented product positions and consumer-friendly retail prices.

On the other hand, although the integration of Mini LED backlights significantly bolsters LCD panels’ traditionally weak contrast levels, significant marketing costs are required to ensure consumers understand the benefits of this new backlighting technology. While OLED solutions are already widely recognized in the market, Mini LED products’ vast marketing costs represent a significant competitive weakness against OLED products. Furthermore, manufacturing costs of display solutions that feature Mini LED backlights and LCD panel modules are about 30-50% higher than those of equivalent solutions featuring OLED panel modules due to the former’s complex design, high number of components, and limited economy of scale. Hence, high manufacturing costs are yet another obstacle preventing brands from investing in Mini LED development.

(Image credit: PikiWizard)

2021-11-19

Notebook Shipment for 2021 Expected to Reach 244 Million Units in Light of Weakening Market for Consumer Models in 2H21

TrendForce expects global notebook shipment for 2021 to reach 244 million units, with 49% and 51% of the annual shipment taking place in 1H21 and 2H21, respectively. This distribution would seem to indicate that, although the growth momentum of consumer notebook models that began in 1H21 has gradually waned, strong performances from the commercial notebook segment are able to provide some upward momentum for the notebook market’s shipment performance in 2H21.

The first half of the year saw tight supply of materials, strong upside demand, and a market driven primarily by consumer models

Despite the shortage of materials from the supply chain, global notebook shipment for 1H21 still reached 119 million units. During this time, the COVID-19 pandemic caused considerable worldwide impact. Given the important role played by notebook computers in bringing business, education, and entertainment from the real world to the virtual world, shipments of commercial notebooks, Chromebooks, and gaming notebooks, which respectively fulfill the three aforementioned functions, remained strong.

Take Chromebooks as an example; shipment of these products reached 25.94 million units for 1H21, primarily thanks to a wave of procurement demand for educational notebooks, which are primarily produced and sold in response to tender offers, by the US, Japanese, and western European governments in an attempt to immediately kick off distance learning initiatives. The bullish Chromebook market also incidentally resulted in a 70% increase across the 1Q20-2Q21 period in the ASP of 11.6-inch notebook panels, which are used in mainstream Chromebook models.

Shifting demand and stabilizing supply of materials in 2H21 mean commercial notebooks have now become the primary driver of market growth

As the supply chain’s availability of materials gradually stabilizes in 2H21, global shipment of notebooks for the period will still likely reach 125 million units, a 5.7% increase compared with 1H21. Regarding quarterly shipments, market demand peaked in 3Q21, during which a total of 62.73 million notebooks were shipped. Following this peak, demand has remained mostly unchanged in 4Q21, reaching a forecasted 62.71 million units in shipment for the quarter. This slight decline can primarily be attributed to an estimated shipment of 11.62 million Chromebooks for 2H21, which is a 55.2% decrease from 1H21. The downturn of Chromebooks indicates that the educational notebook market, which is mostly driven by Chromebooks, no longer has sufficient momentum to keep up its high shipment in 2H21. Instead, demand has now shifted to commercial notebooks as the pandemic’s slowdown resulted in a corresponding return to physical offices and schools for work and study, respectively.

Fortunately for notebook manufacturers, commercial notebooks, which are primarily aimed at servicing enterprise customers, are able to shore up the weakening demand for other product categories in time in 2H21. On average, up to 34% of the product mixes offered by notebook brands such as Dell, HP, and Lenovo now consist of commercial models during this period. As such, TrendForce expects commercial notebook shipment for 2021 to reach 65.61 million units and account for 26.9% of total notebook shipment for the year.

2021-09-28

Annual Notebook Shipment for 2021 Projected to Reach 240 Million Units, Though Demand in 4Q21 Remains Contingent on Market Trends, Says TrendForce

As growing vaccination rates worldwide starting in July lead to a gradual easing of lockdowns, the overall demand for notebook computers has also experienced a corresponding slowdown, with Chromebook demand dropping by as much as 50%, according to TrendForce’s latest investigations. However, factors such as a wave of replacement demand for commercial notebooks in Europe and North America due to the return to physical workplaces, as well as brands’ aggressive efforts to rush out their 4Q21 shipments ahead of time due to global port congestions, became the primary drivers of notebook demand in 3Q21. Hence, annual notebook shipment for 2021 will likely reach 240 million units, a 16.4% YoY increase.

TrendForce further indicates that 4Q21 will welcome both the gradual release of new models equipped with Intel’s next-gen CPUs and a wave of replacement demand for notebooks featuring Windows 11. Even so, overall notebook shipment in 4Q21 will depend on the status of the COVID-19 pandemic and the demand for commercial notebooks. As vaccinations become even more widespread in 2022, pandemic-related spending is expected to decline as a result. TrendForce therefore expects global notebook shipment to decline by 7-8% YoY next year and reach approximately 220 million units, although this still represents a growth of 60 million units over the shipment volume for 2019, prior to the emergence of the pandemic.

Annual Chromebook shipment for 2021 is expected to reach about 36 million units in light of waning demand, while HP and Samsung suffer the brunt of the decline

Chromebook became the primary driver of overall notebook shipment in 1H21. Nevertheless, increased vaccinations in Europe, North America, and Japan in 2H21 have led to a slowdown of Chromebook demand, which mostly arose in response to the needs of distance education. Furthermore, given the relatively high penetration rate of Chromebooks, Chromebook shipment subsequently fell by more than 50% within a single month in 2H21. In particular, as Chromebooks occupy a relatively high share of notebook shipments by HP and Samsung, these companies’ notebook shipment is expected to decline by 10-20% in 2H21 compared to the first half of the year. However, the US FCC released the Emergency Connectivity Fund, which totals US$7.17 billion, in July in order to facilitate the purchase of such equipment as notebooks, tablets, and network connectivity devices by schools and libraries. This fund will likely sustain the demand for Chromebooks for the next year. For 2021, Chromebook shipment is expected to reach 36 million units.

As the workforce in Europe and North America returns to physical workplaces in 2H21, a wave of replacement demand for commercial notebooks is expected to emerge as well, with Dell benefitting the most, since commercial notebooks occupy a higher share of Dell’s notebook portfolio compared to any other brand. Dell’s average monthly shipment of commercial notebooks in 2H21 is expected to surpass 1H21 figures by about 20%. As previously mentioned, it remains to be seen whether the demand for commercial notebooks will persist in 4Q21. Furthermore, the release of new models featuring Windows 11 support and Intel’s next-gen CPUs will also generate yet another wave of replacement demand. Taking these factors into account, TrendForce expects overall notebook shipment for 4Q21 to remain relatively unchanged from 3Q21 figures in the best-case scenario, and momentum driving notebook shipment will likely persist through the end of the year.

It should be noted that the availability of semiconductor components throughout the supply chain remains limited. For instance, the persistent shortage of Wi-Fi module IC, Type C PD IC, and PMIC has created a bottleneck for notebook manufacturing, while mainstream 14-inch and 15.6-inch FHD IPS panels are also in tight supply. Conversely, demand for entry-level and mid-range 14-inch and 15.6-inch HD TN panels is gradually being met, and 11.6-inch notebook panels are starting to experience a price drop due to oversupply. As notebook demand plateaus while panel supply increases, the supply and demand of notebook panels is expected to reach an equilibrium in 4Q21.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

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