TrendForce reports that the second quarter revealed notebook inventory channels displaying healthy levels. Both North America and Asia-Pacific regions are demonstrating a healthy appetite for mid and low-tier consumer models. This isn’t just a race to restock; it’s a strategic move to gear up for the anticipated back-to-school wave in the third quarter. And here’s the zinger—just as Google prepped to roll out its licensing fees, Chromebook shipments hit a peak. This surge propelled Q2 notebook shipments to 42.52 million units, marking a 21.6% quarterly leap. However, a look at the overall picture reveals a total of 77.5 million units shipped in the first half of the year—down 23.5% YoY.

TrendForce further points out that for 2H23, growth momentum is anchored in the purchasing power of end consumers. However, with the economic outlook of the two major notebook markets—the US and Europe—shrouded in uncertainty, the typical seasonal purchasing demand is muted. What’s more, some of this demand was already met in Q2. As a result, Q3 notebook shipments are forecast to witness a moderate growth of 3.8%, tallying up to 44.13 million units. Annual notebook shipments are projected to hit 163 million units, marking a YoY decline of 12.2%.

Gearing up for 2024, the tech horizon looks promising. As market inventories align with healthier metrics and anticipated inflationary pressures begin to stabilize, global notebook shipments are poised for a potential rebound. Yet, it’s not all roses. With the global consumer environment still feeling the pinch, even as demand gradually ticks up, the market hasn’t flashed strong bullish signs just yet. TrendForce projects an annual growth rate hovering between 2–5% for 2024, pushing shipments slightly above pre-pandemic levels. Post inventory adjustments, the broader market is set for a gentle recovery. However, all eyes remain on the twin giants of consumer markets—China and the US—to gauge if we can indeed anticipate a more robust shipment surge.

In the latter half of the year, the absence of seasonal market activity paired with subdued demand has not only impacted corporate profitability but also posed challenges for the upcoming year’s budgeting. Concurrently, the rise of AI and the emphasis on its foundational infrastructure might sideline IT expenditures. While Windows 10 is set to end its support in October 2025, it’s anticipated to spur a wave of business device upgrades starting in 2024. However, TrendForce believes that based on the demand for commercial notebooks, the momentum and urgency of this upgrade wave might be delayed and subdued, making significant shipment growth less probable.

On the consumer demand front, when examining the world’s economic powerhouses, China faces challenges due to a subdued economic and employment environment, casting a somewhat pessimistic view on its market development. In contrast, the US saw a robust rebound in demand in 2023, but anticipations hint at tempered growth in 2024. Europe, after undergoing a two-year demand recalibration, might witness a consumer resurgence in the latter half, should the broader economic climate brighten. Finally, Southeast Asia, buoyed by a burgeoning consumer segment, forecasts upward-trending shipments, indicating a modest growth in consumer-focused devices.

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

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.)

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.