After 30 months of disruption caused by the epidemic, the supply chain of PCs has returned to normal - and the heads of procurement teams at large companies need not worry anymore. Or rather, Dell has expressed its view of supply chain recovery, which has grown rapidly by making orderable desktops and laptops and selling them directly to customers.
"There's always going to be some issues in this chain, but overall, from our perspective, it's working more like the historical norm," said Dell CFO Tom Sweet.
It also helped that consumer demand for computers plummeted and the average selling price of some components fell as their availability increased. Dell said it is working to reduce inventory before it can benefit from these lower costs.
Although power management, microcontrollers, and optoelectronic devices are still relatively scarce, chip delivery times accelerated slightly in August, according to Susquehanna International.
Dell's business PC client business was strong, driving growth in its segment. As for rival HP, it shipped more devices through retailers and felt the pinch in the third quarter ending in June of fiscal 2022.
Speaking at the Evercore ISI annual technology conference, HP CEO Enrique Lores said the company experienced a "significant backlog of inventory in the channel" in the most recent quarter, a sign that pressures on the supply chain are changing.
“Traditionally, when this happens, the market gets more aggressive in pricing because it’s about reducing inventory. We think this will have an impact in the short term, expecting more competition given high inventory prices, especially Some of our competitors have large inventories."
"Given the favorable pricing [PC vendors] have had over the past few years, we expect pricing to rationalize over time," added Lores.
A week ago, IDC forecast a decline in the PC market, largely due to consumer concerns about how they'll pay their household bills and less discretionary spending. IDC says the market will still be bigger in 2022 than it was before the pandemic, and has some hope that Windows 11 will drive PC updates for large enterprises.
One area of hardware that still hasn't returned to normal is servers, although Dell expects component availability to ease over the next three to six months.
At Citi's 2020 Global Technology Conference this week, Dell boss Michael Dell said its infrastructure challenges "are not over. But I hope it is over soon. We still have shortages on some nodes, some types of chips are harder Longer acquisition and delivery times.”
The lesson some tech brands have learned during the pandemic, he said, is how important it is to preserve the elements of manufacturing.
“Many companies, when they outsourced to manufacturing, decided to outsource the management of components to fine-grained management. Maybe they kept the management of some large components. We never did that, but it would be a major mistake because the supply chain’s If there is a problem in any link, there will be a problem.”
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