Moreover, the same brand is seeking partners in India so as to set up local assembly lines that manufacture products targeting local consumers. One US-based brand (that is separate from the two that are mentioned above) will be raising device production volume at its assembly lines in Mexico in order to better serve the North American market. TrendForce estimates that Vietnam will account for 10% of its notebook computer shipments for 2023.Īs for the second model, it involves setting up assembly lines and raising device production in or near a sizable consumer market. From that country, this brand will ship not only notebook computers but also earphones, smartphones, etc. Likewise, another US-based electronics brand that has gained substantial brand influence with its in-house SOCs has decided to establish a complete manufacturing cluster for its products in Vietnam. Moreover, this brand will reduce the share of its device shipments from China to just 20~30% by 2027. Additionally, among the US-based notebook brands, the leader in commercial models has set the target of raising the share of its device shipments from Vietnam to 20% for 2023. Presently, ODMs such as Compal, Wistron, and Foxconn have begun to build notebook assembly lines in Vietnam in response to the requests made by their clients from the US. The demographical advantage might be the more significant incentive for brands and ODMs to set up shop there. At the same time, Vietnam has a relatively young and low-cost labor pool. Materials and components from China can be quickly transported to assembly plants in Vietnam. The first model will be centered on Vietnam as the country has both geographical and demographical advantages. According to TrendForce’s latest observations, strategic considerations about future geopolitical developments could lead to two models for notebook production located outside China. While political and economic pressures are the well-recognized factors that propel US-based brands to change their strategies, these major brands themselves also have the scale to persuade the rest of the participants in the supply chain to follow their lead. Among them, US-based brands have been the most aggressive in relocating device production and finding alternative sources of component supply. Hence, the major electronics brands have revamped their supply chain strategies in recent years. The continuation of the US-China trade dispute has led to increasing geopolitical tensions across the globe. Supply Chain Is Shifting, and US-Based Brands Are Main Driving Force Behind ODMs’ Relocation Efforts This projection is a 10-year low for first-quarter result. Because of these actions, global notebook shipments are forecast to drop by 9.5% QoQ to 35.1 million units for 1Q23. Moreover, they completed shipments for some orders ahead of schedule before the end of 2022. In view of this situation, notebook brands have raised inventory for their popular device models. Besides low demand visibility, whether device shipments will be impacted by another round of pandemic-induced component shortages has also been a major concern. Furthermore, order placements from channels are going to be much more restrained.Īdditionally, the Lunar New Year holiday for 2023 is going to arrive earlier compared with the previous years, and notebook brands have anticipated that the course of the ongoing COVID-19 outbreaks in China will become a huge market variable after the holiday. Since the sales results for 4Q22 were lackluster, efforts to get rid of the existing stockpile of whole devices might continue through 2Q23. This development was mainly attributed to factors such as high inflation suppressing consumers’ disposable income. Looking at regional markets, notebook brands (PC OEMs) slashed prices in the US and China, but their sales results still did not meet expectations. TrendForce expects the YoY decline to moderate to about 7.8%, but shipments are projected to total only 171 million units.īecause market demand was anemic in 4Q22, promotional activities related to the traditional year-end peak season did not generate a lot of sales momentum. As for 2023, the outlook on the performance of the notebook computer market remains uncertain at this moment. According to TrendForce, due to the various major events that affected the global economy and politics, the overall demand for consumer electronics made a sharp downward turn in 2022, and global shipments of notebook (laptop) computers began to fall over the quarters. TrendForce’s latest analysis finds that global shipments of notebook computers (from ODMs) reached just around 186 million units for 2022, showing a YoY drop of 24.5%.
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