China supply issues hit PC production: Acer

China supply issues hit PC production: Acer

Key parts have been backed up to warehouses, halting laptop production as Acer’s CEO says a phased reopening won’t solve the problem

  • By Lisa Wang / Staff Reporter

PC supplier Acer Inc (宏碁) said yesterday that lockdowns in China to control COVID-19 have upended the supply of key components and disrupted PC production, although chip shortages have improved.

While chip supply constraints largely eased in the first quarter, the company faces uneven supplies of key components due to COVID-19 restrictions in China, Acer’s chief executive officer said , Jason Chen (陳俊聖), during an online press conference.

“Semiconductor shortage was the biggest problem in the first half of last year,” Chen said. “Now we are plagued by a supply chain problem caused by China’s lockdowns.”

Photo: Screenshot from the Internet

With key components unable to be delivered and backed up in warehouses, laptop makers had to halt production, Chen said, adding that a full reopening, not incremental steps, would be the only way to resume. the production.

Inventory increased to around twice its normal level due to port congestion, he said, adding that canal inventory had returned to pre-pandemic levels.

“Balancing supply and demand is a task we are trying to accomplish. There is a lot of difficulty in doing things right,” Chen said.

Acer experienced a significant drop in revenue about two years ago because it did not have enough inventory to meet sudden demand due to work-from-home and remote learning trends, he said. declared.

Acer now has enough raw materials and finished products in stock, he said.

Demand is weakening as the war in Ukraine fueled fears of inflation and an economic slowdown, Chen said, adding that falling household disposable income was hurting PC sales.

Global PC shipments fell 3% annually to 118.1 million units in the first quarter, according to Canalys data.

However, commercial PCs and green PCs are growing, despite the downward trend in the industry, as companies buy computers for employees returning to the office, he said, adding that sales of the series Acer’s Vero green PCs were up 6% month-over-month last month.

Acer expects back-to-school demand and the Christmas holiday to bolster demand, Chen said, adding that new 3D technology is also expected to boost PC demand.

The company launched seven new PC series yesterday, including the green PC series, Vero PCs, with a chassis using 30% post-consumer recycled (PCR) plastics that help reduce carbon emissions by 21%. The computer screen frame uses 30% PCR plastics and the keyboard cap uses 50% PCR plastics.

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