According to a report by Taiwan’s Economic Daily, the share of Chinese companies in Apple’s laptop manufacturing has expanded. After Luxshare secured assembly contracts for AirPods and iPhones, Chinese ODM Wingtec has commenced mass production of the 13-inch MacBook Air at its Kunming facility in Yunnan province, gradually eroding the historical market share of Taiwanese manufacturers like Foxconn and Quanta.

Both Foxconn and Quanta have exhibited relatively conservative stances towards the laptop market this quarter. Apple’s suppliers has typically refrained from commenting on competitor dynamics and single customer order trends. Quanta believes that the laptop market’s recovery is sluggish, with laptop shipments anticipated to decrease by 20% in the coming year. Additionally, the shift of certain Chromebook orders to an early June shipment date, coupled with a high base effect, is expected to result in a decline in the company’s laptop shipments this quarter.

On the other hand, at Foxconn, Chairman Young Liu previously stated that the company aimed to secure a larger market share in the personal computer (PC) segment. However, the decelerating momentum in the laptop industry demand is expected to persist into the latter half of the year. As a result, the third-quarter performance of the computer division is projected to remain on par with the second quarter while experiencing a decline compared to the same period last year.

Presently, Quanta is the largest assembly factory for Apple laptops, followed by Foxconn. According to China’s quality certification center, Wingtec has obtained a 3C quality certificate for its mass production of MacBook Air equipped with Apple’s M2 chip at the Kunming facility.

In the past, Apple’s MacBook Air product line was manufactured by both Foxconn and Quanta. Wingtec is the sole Chinese factory among Apple’s laptop manufacturers. Wingtec, known for its expertise in smartphone manufacturing, announced in April of this year that it secured Samsung’s 2023 smartphone and tablet ODM orders. In recent years, Wingtec has expanded its business scope to include semiconductors through acquisitions of automotive electronics firm Nexperia, successfully entering Apple’s supply chain.

Industry sources indicate that Apple is committed to diversifying MacBook laptop production to include various locations across China. Over the years, Apple has aimed to expand MacBook laptop production to more countries and companies. Analysts speculate that Apple’s ultimate plan is to allocate 55% of MacBook manufacturing to Quanta, 35% to Foxconn, and 10% to Wingtec.

(Photo credit: Apple)

According to TrendForce’s latest research, global NB shipments are forecasted to drop by 5.8% YoY to around 177 million units. However, the downtrend in NB shipments is starting to moderate, and the projected figure for 2023 is expected to represent the lowest point before 2025. Currently, inventory corrections for components and whole devices are taking place in the global supply chain for NBs. Prices are also being cut substantially across sales channels, and PC OEMs have scaled back component procurements. There is a chance that the NB market will return to its usual cyclical pattern and show growth during 2H23, when back-to-school and holiday-related promotions are expected to boost device sales.

However, this scenario will depend on two factors. First, PC OEMs will have been able to effectively get rid of the existing stock of NBs belonging to the older generations during 1H23. Second, global inflation will ease as 2023 progresses. Currently, the IMF forecasts that the rate of global inflation will slide down to 6.5% in 2023, compared with 8.8% in 2023. Such development will help raise the consumer spending related to electronics. All in all, notable inventory corrections and the reduction of inflationary pressure will allow the NB market to leave the gloomy situation of 2022 and get back to upbeat state of quarter-to-quarter shipment growth.

Market Segments for Commercial and Consumer NBs Will Both See Decline in 2023, Chromebooks, Gaming NBs, and Creator NBs Will Become Main Demand Drivers

Looking at the various segments of the NB market, unit shipments and market share are expected to drop for both commercial NBs and consumer NBs. Conversely, Chromebooks will grow in terms of shipments and market share despite various headwinds. In 1H23, mature regional markets such as the US and emerging regional markets such as Indonesia and India will be releasing tenders for Chromebook for educational uses. Turning to gaming NBs, their global shipments are forecasted to increase by 8.3% YoY to 17.45 million units for 2023 thanks to the seasonal demand surge in 2H23. As for creator NBs, the market for them is growing because professional content creators want to purchase a “mobile workstation” in place of a high-end gaming NB for tasks such as building 3D models and processing large amounts of multimedia files. Global shipments of creator NBs are forecasted to rise by 24.9% YoY to around 437,000 units for 2023.

(Note: “NB” stands for notebook or laptop computer.)

On the eve of Apple’s upcoming new product launch conference, the global market research organization, TrendForce, provides the following reference data for your articles and reporting.

Reference data as follows:

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.

The market in general had high hopes for Mini LED notebook computers in 2021. Although most brands were relatively unenthusiastic towards the adoption of Mini LED displays, the release of Mini LED products by Apple will likely generate a copycat effect and inject fresh momentum into both demand and shipment for the Mini LED notebook market. Apple did, in fact, release two brand new MacBook Pros with 14.2-inch and 16.2-inch displays, both of which are equipped with Mini LED backlights as expected. However, these Mini LED notebook displays did not receive as much marketing and publicity as the Mini LED displays used for the iPad Pro models, which had been released about six months prior.

During the unveiling of the 12.9-inch iPad Pro in 2Q21, Apple made special mention of improvements brought about by the Liquid Retina XDR display technology thanks to the company’s adoption of Mini LED backlights. Conversely, perhaps because the new physical dimensions and processors took most of the spotlight, Apple was surprisingly quiet on its new MacBook Pro models’ Mini LED displays as it announced the release of these new computers during its October event. Not only did the Mini LED iPad Pros completely replace the previous edge-lit models, but these new tablets also featured a mere US$100 retail price hike, which basically entirely accounts for the cost of the new displays. Subsequently, the market began eagerly anticipating the release of the new Mini LED iPad Pro models. In contrast, whereas the 14.2-inch and 16.2-inch models of the new MacBook Pros also feature Mini LED displays exclusively, their retail prices saw significant jumps owing to the integration of multiple updated components and designs, in turn refreshing the enthusiasm of the market for Mini LED displays.

Thanks to the release of the two new MacBook models, annual Mini LED notebook shipment for 2021 reached 2.2 million units, representing a 1% penetration rate in the total notebook market. Regrettably, apart from MacBooks, the shipment volume of Mini LED notebooks released by non-Apple brands was rather insignificant. Looking ahead to 2022, given the all-out effort by Apple to ramp up MacBook shipment throughout the whole year, annual Mini LED notebook shipment for 2022 will likely undergo a staggering 360% YoY increase to eight million units for a 3.4% penetration rate. However, judging by notebook brands’ adoption of display solutions at the moment, most non-Apple brands will still gravitate towards OLED panels in 2022, with minimal adoption of Mini LED displays.

If Gen 8.5 OLED panel production lines are able to kick off mass production from 2024 onwards, will Apple transition its MacBook displays to a different solution much like it did for iPad? TrendForce believes that Apple has historically held a receptive attitude towards OLED solutions. Furthermore, from a technology assessment perspective, notebook computers and tablets are relatively similar in their display technologies and, to a lesser extent, use cases. If Apple does decide to transition iPad displays from Mini LED to OLED, then the company will likely do the same for MacBook display as well, in principle. On the other hand, LCD panels are still expected to remain the mainstream display technology for notebook computers in 2025. It, therefore, makes competitive sense for notebook brands to differentiate their products with OLED panels in the high-end segment and with LCD panels and Mini LED backlights in the premium mid-range segment or even mid-range segment. At any rate, given the shrinking gap between the cost structures of Mini LED solutions and OLED solutions, only by continually optimizing the manufacturing costs of Mini LED backlights can suppliers convince Apple to continue adopting Mini LED displays.

（Image credit: Pixabay）