While the stay-at-home economy generated high demand for notebook computers from distance learning and WFH applications last year, global notebook shipment for 2020 underwent a nearly 26% YoY increase, which represented a significant departure from the cyclical 3% YoY increase/decrease that had historically taken place each year, according to TrendForce’s latest investigations. The uptrend in notebook demand is expected to persist in 2021, during which notebook shipment will likely reach 236 million units, a 15% YoY increase. In particular, thanks to the surging demand for education notebooks, Chromebooks will become the primary growth driver in the notebook market. Regarding the shipment performance of various brands, Samsung and Apple will register the highest growths, with the former having Chromebooks account for nearly 50% of its total notebook shipment this year and the latter continuing to release MacBooks equipped with the M1 chip.

Chromebooks have been accounting for an increasingly high share in the notebook market in recent years, and Chromebook shipment is expected to reach a historical peak this year at 47 million units, a staggering 50% YoY growth. The vast majority (70%) of global Chromebook demand comes from the US, while Japan takes second place with 10%. However, the US education notebook market is gradually saturated with Chromebooks, and the general public has also been returning to physical workplaces and classrooms following the lifting of domestic restrictions. In addition, the Japanese GIGA School program, which equips student with computers and internet access, has notably slowed down its notebook procurement. The global demand for education notebooks will therefore slightly lose momentum in 2H21.

Regarding notebook brands, as Chromebooks occupy a relatively large allocation of notebook shipment by Acer and Samsung, the two companies are likely to bear the brunt of the education market’s downturn. TrendForce therefore believes that the Chromebook market’s growth going forward will mainly depend on regions outside the US as well as non-education applications.

Global demand for notebooks will decelerate in 2H21, with the bulk of the slowdown taking place in 4Q21

It should be pointed out that certain recent rumors claim that the demand for notebooks will decline in 2H21. This decline can be primarily attributed to the fact that notebook brands are increasingly finding Chromebooks’ low margins to be unprofitable, while 11.6-inch panels, which are used in 70% of all Chromebooks, have also skyrocketed in price, and certain semiconductor components are in shortage. In light of these factors, brands are starting to lower the share of Chromebooks in their overall notebook production for 2H21. TrendForce expects consumer demand in Europe and the US to gradually weaken in 3Q21. However, low inventory levels in the channel markets will still generate some upward momentum propelling the notebook market. Hence, quarterly notebook shipment in 3Q21 is expected to remain unchanged compared to 2Q21.

Furthermore, the pandemic has gradually been brought under control in Europe and the US due to increased vaccinations. Therefore, the slowdown of demand in the overall notebook market and in education sector bids will not come into force until 4Q21, during which notebook shipment is expected to reach 58 million units, a 3% QoQ decrease. At the same time, the fact that notebook manufacturers overbooked certain components, which subsequently resulted in additional inventory, will likely have implications in 4Q21 as well. Going forward, although notebook demand will likely slow in 2022, the normalization of the hybrid-work model as well as the recovering demand for business notebooks will provide some upward momentum for annual notebook shipment next year, which will reach 220 million units, a minor downward correction of 6% YoY.

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

Since 3Q20, memory suppliers’ production capacities allocated to server DRAM have dropped to about 30% of the total DRAM production capacity, according to TrendForce’s latest investigations.

While this decrease took place as suppliers sought to increase the supply of other DRAM products in higher demand, it also represented an attempt for them to adjust the ASP of various DRAM products. Furthermore, since the persistent demand for consumer electronics has shown no signs of slowing down in 1Q21, as of now suppliers have also been maintaining the same capacity allocation as last year.

However, given that second quarters have traditionally marked the cyclical upturn in server shipment, server DRAM demand is thus expected to ramp up in 2Q21, in turn prompting suppliers to raise their quotes for server DRAM. TrendForce is therefore revising up the QoQ increase in server DRAM contract prices for 2Q21 from the original forecast of 8-13% to the adjusted forecast of 10-15%, with certain transactions potentially involving as much as a 20% price hike.

Server DRAM contract prices are likely to increase by more than 40% throughout the year as demand is likely to persist through 3Q21

With regards to demand, after DRAM prices reached rock bottom at the end of last year, the oversupply situation in the market and the pressure on buyers to destock their inventory have both gradually stabilized by now. As prices closed in on historically low levels, buyers became more and more active in their procurement activities. In addition, data center demand for server DRAM is set to increase after 1Q21, driven by the increasing cloud migration needs of the post-pandemic “new normal”. This demand will likely persist through 2H21, thereby injecting additional growth momentum into the overall server market.

With regards to supply, on the other hand, DRAM suppliers will be relatively conservative in their capacity expansion efforts this year, with most suppliers having no plans to expand their capacities. Also, the oligopolistic nature of the DRAM industry means suppliers generally prioritize profitability over other factors when allocating their production capacities. Case in point, the rising popularity of WFH and distance education led suppliers to reallocate their production capacities last year. More specifically, suppliers allocated their capacities to first fulfill the high demand from the smartphone and notebook computer markets in 3Q20. As a result, capacities allocated to server DRAM underwent a corresponding decline during this period.

On the whole, TrendForce expects server DRAM contract prices to increase by about 8% QoQ in 1Q21 and by 3-4% MoM on average within the quarter. Moreover, TrendForce also does not rule out the possibility that server DRAM contract prices may experience additional slight MoM increases past this period given that contract prices are negotiated on a quarterly basis. Looking ahead, TrendForce indicates that server DRAM will remain in high demand through 3Q21, as geopolitical uncertainties and the shift of work life towards WFH continue to generate upward momentum for server shipment. Therefore, server DRAM contract prices are expected to rise by more than 40% cumulatively from late 2020 to late 2021.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

Owing to the stay-at-home economy brought about by the COVID-19 pandemic in 2020, not only did yearly notebook computer shipment surpass 200 million units for the first time ever, but the 22.5% YoY growth was also the highest on record, according to TrendForce’s latest investigations.

However, in comparison with 2Q20, during which production lines resumed operations, and notebook demand saw an uptick, the current global market is plagued by the ever-intensifying pandemic, with various countries instating border control and lockdown measures, making it impossible at the moment to accurately forecast the state of the notebook market in 2H21. Nevertheless, TrendForce currently expects global notebook shipment for 2021 to reach 217 million units, an 8.1% increase YoY. Incidentally, it should be noted that the increasing popularity of distance education has also galvanized a rising demand for Chromebooks, which have contributed substantially to the growth of the overall market. Chromebooks accounted for 14.8% of the global notebook shipment in 2020, while this rate is expected to rise to 18.5% in 2021.

As WFH becomes the new normal for office work, online meeting functionalities will be a major focus of business notebook designs

Since 2020, various companies worldwide have announced the implementation of WFH measures, with certain companies adopting WFH until September this year. In order to meet the audiovisual demands of online meetings, as well as the personal and entertainment needs of end users, notebook brands have been making improvements to their business notebooks’ functionalities, including AI, camera modules, sound quality, background noise removal, and image qualities. In particular, HP, Dell, and Lenovo are each releasing new mid-range and high-end mixed-use business notebooks in response to the commercial opportunities generated by the aforementioned user demands. Demand for this product category is expected to peak in 1H21 and in turn massively raise overall notebook shipment for the period as well.

In addition to mixed-use business notebooks, the new normal in the post-pandemic era has compelled brands to quickly establish dominance in the Chromebook market as well. Although Chromebook shipment reached 29.6 million units in 2020, an impressive 74% YoY growth for year, current demand from most educational markets has yet to be met. This, along with continued Chromebook adoption in Central America, South America, and the Asia-Pacific regions, resulted in peak Chromebook demand. At the moment, TrendForce projects yearly Chromebook shipment to exceed 40 million units in 2021, a 37% YoY growth. Moreover, given Google’s aggressive product strategies, this projection may have even further room for growth.

Continued high demand for Chromebooks has resulted in shifts in the OS and CPU markets

With regards to operating systems, Windows remains the dominant choice in the notebook market. However, due to the rapid growth of Chromebooks in 2020, Windows’ market share dropped below 80% for the first time ever. Windows is unlikely to recover its lost market shares in the short run, since its decline is expected to persist going forward. TrendForce expects the market shares of Windows, Chrome OS, and MacOS to each stabilize at about 70-75%, 15-20%, and below 10%, respectively.

With regards to notebook CPUs, AMD’s Zen+ microarchitecture-based CPUs saw a major uptick in notebook adoption in 2019, with about an 11.4% market share. This figure rose to 20.1% in 2020 after a period of product ramp-up. In particular, the Ryzen 3000 series CPUs have been receiving excellent market feedback in the entry-level and mid-range notebook segments, thereby convincing notebook brands to start equipping their Chromebooks with AMD CPUs, bringing about a further and considerable growth in AMD’s market share.

The Apple Silicon M1 processors, based on the ARM architecture and officially released in November 2020, reached a mere 0.8% market share for the year. Apple adopted the ARM architecture primarily to optimize MacBook performances. Along with the release of Apple Silicon M1, Apple has also completed the integration between its hardware, software, and SaaS platforms. The company is expected to release 14-inch and 16-inch MacBook Pros, both of which will be equipped with Apple’s in-house CPUs, after 2Q21, raising Apple’s notebook market share to about 7%. The 7% and 20% market shares from Apple and AMD, respectively, mean that Intel will be faced with increasing competitive pressure in the market and need to deliver an appropriate product strategy in response.

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