PC component shortage to continue until 2022

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Component supply rebounds in Q2

Although 2020 was a bad year for most industries, PC manufacturers enjoyed booming sales as people and businesses transitioned to work-from-home models. That being said, many companies are still far away from fulfilling their outstanding orders. Reuters reports that the industry shortage isn’t likely to be cleared until 2022.

The combination of increased purchasing and supply chain disruptions caused by the pandemic has proven to be a bigger challenge than most experts originally predicted. It will be interesting to see how the industry recovers in 2021.

Overwhelming Shipments

Prior to the chaos caused by the pandemic, the PC industry was in decline. In 2008, global PC shipments peaked at 300 million per year, Reuters reports. The following years saw that figure shrink dramatically, dropping as low as 250 million in recent years.

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Most experts believed that the days of PCs were over and that a recovery for the industry was unlikely. Now, analysts project that there will be 300 million PC shipments in 2020. That marks a 15 percent increase from last year. Of course, the growth can be attributed to COVID-19. For remote workers, students, and those who want to stay entertained at home, a PC is essential.

While the boom in PC sales is a good thing for the industry, not all manufacturers were ready for it. Many were forced to add new suppliers and adjust their shipping patterns to keep up with demand. For instance, Reuters reports that Acer has been absorbing the cost of delivering its laptops via plane rather than using freight barges or trains to decrease shipping times. Even so, since the pandemic forced assembly lines to shut down earlier in the year, many companies are running behind with their shipments.

That has left certain components—like processors and displays—in short supply. Acer’s Gregg Prendergast says, “The whole supply chain has been strained like never before.”

Upgrades and Stimulus

While 2020 was all about buying out of necessity, experts believe that 2021 will be defined by upgrades. Manufacturers have been working hard to respond to the changing needs of consumers.

There are a number of devices coming to market next year that are full of features popularized by the pandemic. For instance, things like high-definition cameras for Zoom calls and cellular chips to access new 5G networks will be important for upcoming devices.

Analysts believe that advanced features like artificial intelligence and increased battery life could be major draws for businesses and schools seeking to upgrade existing PCs and laptops.

Moreover, government stimulus funding may drive individuals and organizations to purchase new devices and upgrade old ones. Ryan Reith, vice president at the analysis firm IDC, believes that this will extend the component shortage until 2022. Manufacturers and suppliers will be unable to keep up with demand next year. As such, it will take some time before the necessary hardware for PCs is back in stock.

All things considered, it will be interesting to see how 2020’s PC renaissance extends into the future. Sales could start to decrease again once the world returns to a pre-virus state. Or, the emphasis on remote work could continue to bolster sales as more companies move away from physical offices.

In the meantime, one thing is clear. PC components will still be hard to find next year.

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