NB ODM shipment in June shows slight growth

The top 5 ODMs, continuing their momentum from April, accomplished May NB shipment of 12.8M, representing around 2% MoM. However, impacted by EMS’ disappointing shipment achievement, due to the losses of OEM orders, the aggregate NB shipment in May was lower than the original expectation. As for the outlook of June, benefited from OEM’s increasing portion of sea shipment, ODM’s June shipment target increased around 10% MoM. However, as regards overall NB shipment performance, 2Q’s shipment units of 48.2M are actually under-performing; representing only 8.6% QoQ and 0.7% YoY even under the circumstance that 1Q shipment base is already low. As for 2Q’s QoQ comparison, 8.6% is in line with 2006 to 2010’s average 5~10% quarterly growth. Nevertheless, 2Q’s YoY performance growth of 0.7% is far behind the average 20% YoY during the previous 5 years. NB shipment of the first half of this year is around 92.7M; representing slight YoY decline of 0.8% which is far behind the average 25% YoY during the previous 5 years as well. Looking forward to the NB shipment in the 2nd half of this year, according to DRAMeXchange, there are still several factors which could possibly have negative impacts, although traditionally hot seasons bring more promising NB sell through. 1. Pointed out from the channel’s sales survey, Sandy Bridge’s penetration rate is still low while the previous generation Calpella platform remains main stream. Although Sandy Bridge platform accounts more than 60% of current ODM NB shipment, it is still critical to closely observe the inventory digestion of previous generations in order to conclude the sales performance of the latest platform. 2. Even with the anticipated bargain price offerings for promotion purposes in the up-coming hot seasons, according to DRAMeXchange, several OEM makders are experiencing difficulty in making shipment to channel due to sluggish consumer purchase rates in Europe, disappointing sales performance in China and increasing unemployment rates in the U.S. 3. The sales performance of hotly-discussed Tablet PCs remains solid, and it is expected that more powerful function-wise Tablet models will be introduced to the market. Low cost NB, suffering from the crowding effect with limited consumer purchase budget, will be impacted negatively on shipment units due to Tablet PC’s cannibalization. To make a comprehensive observation of the future NB market, DRAMeXchange estimates 110M shipment units in the 2nd half of 2011; representing merely 9% YoY growth which is much lower than the historical 20% YoY increase. It is not only because of the burgeoning tablet PC and Smartphone’s cannibalization but also due to longer PC placement cycles impacted by the lack of killer applications being introduced. Combining with low visibility of order forecast and gloomy forecast of macroeconomic environment, NB total shipment is facing more challenges in the 2nd half of this year.