WASHINGTON: We are introducing a fourth-quarter laptop unit-shipment estimate of negative 6% quarter-over-quarter. Given material order pull-ins by PC original equipment manufacturer (OEM) customers last month and low visibility into fourth-quarter end-demand, notebook original design manufacturers (ODMs) now expect September to be the peak unit-shipment month for the remainder of the year.
Conversations indicate that PC OEM customers still remain cautious with inventory levels and continue to order in a just-in-time manner, with end-demand signals likely to dictate shipment linearity going forward.
Our unit-shipment estimate of a 6% quarter-over-quarter decline in the fourth quarter implies an overall 9% year-over-year decline in unit shipments at notebook ODMs for 2015. We note this forecast aligns with Intel’s (ticker: INTC ) guidance for the PC market to decline by a high-single-digit percentage this year, as well as our modeled sales decline in Intel’s CCG (Client Computing Group) of 10% year-over-year in 2015.
September unit shipments closed on a very strong note. We now expect unit shipments of 13.65 million in September, up 21% month-over-month, versus a prior estimate of 11.85 million, or up 5% month-over-month.
The upward revision is attributable to a higher allocation of PC OEM shipments by sea (longer delivery lead times) to save costs, as well as Intel’s recent launch of new Skylake processor platforms. We believe the shipment strength in September was across all major PC OEM customers.
Our third-quarter unit estimate increases materially to up 11% from 5% quarter-over-quarter. This is supported by our recent supply-chain checks in late September, which suggest that rebounding notebook-building activity from August has extended into September, with notebook ODMs indicating that shipments should well exceed prior expectations in September.
Notebook ODMs cited inventory restocking after the launch of Intel’s Skylake platforms as the primary driver of the strength, with hub inventory levels rising to four weeks versus depressed levels of two weeks in July.
Material third-quarter shipment upside at notebook ODMs supports our positive stance on Intel. We remain buyers of Intel due to: 1) PC supply chain component destocking in the first half, as Intel’s sell-in versus PC supply chain sell-out in the second quarter was the lowest since second-quarter 2012; 2) improved demand forecasts at motherboard manufacturers and notebook ODMs since August; and 3) supply-chain conversations indicating a strong rebound in server orders from data-center customers, also endorsed by recent commentary from Synnex ( SNX ), Mellanox Technologies ( MLNX ) and Micron Technology ( MU ).
Other PC-exposed companies under our coverage universe include Advanced Micro Devices ( AMD ), Marvell Technology Group ( MRVL ), Micron, Nvidia ( NVDA ), On Semiconductor ( ON ) and Synaptics ( SYNA).
