Global PC sector suffers worst drop as restrictions on Chinese chips loom

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The global PC market suffered its biggest decline on record as economic uncertainty and a glut of unsold inventory weighed on shipments for the fourth consecutive quarter.

Global desktop and laptop computer shipments fell 19.5% in the third quarter of 2022 compared to the prior year period, according to research firm Gartner. This is the largest decline Gartner has documented in more than two decades of market tracking, echoing data compiled by Canalys, which released similar figures showing double-digit declines.

PC’s dismal numbers coincide with a period of upheaval for the global tech industry, which is now analyzing a plethora of restrictions Washington imposed on chip and tech exports to China last week. Leading chipmaker Taiwan Semiconductor Manufacturing Co. saw its steepest drop ever on Tuesday as the market reacted to extended sanctions.

PC vendors and major vendors like Advanced Micro Devices Inc. had previously warned of a market slowdown this year, underscoring the need for new growth to replace demand for remote work and e-learning. as the pandemic subsides. While shipping volume remains comparable to pre-pandemic levels and robust hiring numbers suggest positive business demand, economic headwinds are likely to impact IT spending for both businesses and individuals next year, according to Canalys.

“The rapid deterioration in demand across all segments is a worrying sign not only for suppliers, but also for supply chain stakeholders,” said Ishan Dutt, senior analyst at Canalys. “Intel and AMD are facing headwinds from weak PC businesses, and smaller component makers from ICs to memory are cutting production and lowering profit forecasts.”

The market is expected to recover by the second half of 2023, Dutt added.

Lenovo Group Ltd. remained the world’s largest PC maker in the third quarter, although its shipments fell about 15%, according to Gartner. Of the top five vendors, HP Inc. saw the biggest decline in the third quarter with a 28% decline.

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