The following is an excerpt Tiernan Ray | May 12, 2017 | Barrons.com |
Cowen & Co.’s Timothy Arcuri today reports that the trend for the personal computer market that he’s observing in shipments thus far is not good for Q2, and that Intel’s (INTC) own forecast for a 5% decline in total for this calendar year is looking more and more like the right assessment.
Counting the reported shipments in April of original design manufacturers, or “ODMs,” such as Quanta, firms, primarily in Taiwan, that make the bulk of the world’s notebook computers, Arcuri writes that Q2’s results are looking very weak, even assuming some improvement in May and June:
April was weak, but CQ2:17 ODM notebook production should be heavily back-end loaded w/ our field work pointing to a much stronger than seasonal May and June (by 500bps each). Even so, April was so weak that CQ2:17 ODM notebook production looks up 4% Q/Q (+5% Y/Y) – about 150bps below seasonal – following our extensive supply chain work. Given very strong correlation (85%) and R2 (73%) between ODM and global notebook shipments, we think notebooks/ultramobiles could decline 2% Q/ Q in CQ2 (+1% Y/Y) that is 100bps below our current estimate but in-line w/ 10-year seasonal. We note that for CQ2, ODM shipments have outgrown PC sell-in numbers (reported by Gartner) the last 7-years in a row; therefore, our expectation for a 2% Q/Q decline also makes sense in this context.
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