By Jonathan Cassell
Global PC shipment growth is failing to meet expectations in 2024, with disappointing uptake of AI-enabled PCs in Q3 potentially leading to more favorable purchasing conditions.
PC unit shipments declined in the 2% range in Q3 on a year-over-year basis, according to market watchers. The poor results indicate that consumers and businesses haven’t yet warmed up to the new wave of PCs that aim to deliver more secure, private and personal AI experiences. While forecasters still expect annual PC shipment growth of about 2.5% in 2024, this is down from previous outlooks in the 5% range.
The Q3 setback occurred even though PC makers and semiconductor suppliers this year have flooded the market with products designed to fuel the AI craze. Major PC brands, including Lenovo, Dell and HP, have released systems with built-in AI acceleration hardware that meets the required performance threshold of 40 trillion operations per second (TOPS). On the chip side, Qualcomm, Intel, AMD and others have released AI acceleration chips specifically designed for PCs.
Qualcomm came out of the gate quickly as its X Series chips scored key design wins this year, including in a Microsoft Surface Laptop and a Surface Pro tablet. Intel plans to strike back in October with the start of shipments of its Ultra 200S chips.
PC shipments are also falling short of expectations due to a delay in releasing Microsoft’s next-generation Windows 12 operating system. Although many had expected Windows 12 to debut this year, the apparent release date has been pushed back to late 2025. With new features like a resigned user interface, improved security and performance and increased AI capabilities, Windows 12 is expected to trigger a major refresh cycle for PC purchasing.
The subpar results for PCs have spurred speculation that conditions should shift in the DRAM market. Pricing has been elevated and availability has been constrained for DDR4 and DDR5 DRAM used in PCs as memory as suppliers have shifted production to highly desirable high-bandwidth memory (HBM) employed in data center AI applications.
Furthermore, a report from a prominent industry watcher suggesting that HBM is oversupplied and due for a correction has raised hopes that memory market purchasing conditions will soon improve for all types of DRAM. However, this opinion is controversial and not borne out by Commodity IQ data at this time.
Commodity IQ predicts that challenging purchasing conditions will continue in Q4 and beyond for DDR4 and DDR5. However, in a possible sign that buying conditions may improve, the Commodity IQ Demand for DRAM plunged by 20% in September compared to August, indicating a decline in sales that could result in lower prices.
Amid these mixed market signals, DRAM buyers should closely monitor their suppliers and watch for any signs that better pricing and delivery terms may be available.
Jonathan Cassell is the lead analyst for Supplyframe Commodity IQ