PC OEMs such as Acer, Asus and MSI are facing overstocking due to low consumer demand, China Times reports. Similar problems are faced by PC and laptop ODM manufacturers such as HP, Dell, Apple.
The two companies hardest hit by the inventory overload are Asus and Quanta. Asus has accumulated inventories worth the equivalent of $6.8 billion. This is almost 60% more than inventory levels at the same time last year. Quanta has about $8.4 billion in inventories, up nearly 55% from last year. Along with Compal, Inventec and Wistron inventory, there is approximately $32.30 billion worth of goods released in the second quarter of this year in warehouses.
The China Times post provides more in-depth insider information on Asus’ inventory composition and the company’s take on the situation. From the looks of it, about half of Asus’ inventory is finished products, while the other half is components and integrated circuits.
It is reported that some Asus products and components must be sold in the coming quarters, otherwise they will become obsolete and lose a lot of value. Asus estimates that it can use about 80-90% of its available chips and components to produce next-generation products and PCs. However, Asus has set a goal of clearing a quarter of its existing inventory by the end of the year.
Aggressive inventory cleanup targets can be helpful for end users looking to get a deal. China Times sources believe that most PC brands will “aggressively promote finished products through sales channels through discounts and promotions.” As a result, PC and component manufacturers will simply have to sacrifice some of their profits in order to get rid of retail and warehouse stock. How companies achieve this could significantly impact their financial performance for the third and fourth quarters of 2022.