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In a nutshell: Corsair is the latest company to confirm that the global economic downturn is impacting its bottom line. The PC giant has announced it expects a preliminary unaudited loss between $10 million to $11 million for the quarter ended June 30, 2022.
Corsair is joining Seagate, Snap, Twitter, and many others in blaming "macroeconomic headwinds" for its disappointing quarterly results. Andy Paul, Chief Executive Officer of Corsair, said the first half of the year had been a challenging time for the company.
Corsair's excellent PC-based product range is extensive: memory modules, PC cases, SSDs, coolers, peripherals, and more. Paul notes that consumers are reigning in their spending on gaming gear as worries about the economy intensify. With inflation rising and the war between Russia and Ukraine showing no signs of abating, many people are thinking twice before making non-essential buys. Paul notes that this is especially true in Europe.
The scenario has caused a buildup of inventory in Corsair's warehouses and in the retail channel, leading to its channel partners delaying ordering while they clear the excess.
PC shipments are predicted to fall -9.5% this year
The report wasn't all bad news. Paul added that there had been a recent uptick in activity among PC enthusiasts looking to build gaming PCs, pointing to falling graphics card prices as one of the reasons behind this trend.
The CEO noted that the self-build PC market is expected to accelerate in the second half of the year following the release of Nvidia's RTX 4000 series, AMD's Radeon RX 7000 cards/Zen 4 processors, and Intel's Raptor Lake CPUs. This will result in an uptick in sales for Corsair's line of products, with the likes of high-end coolers, cases, PSUs, and DDR5 modules expected to experience increased demand.
It seems the first signs of recovery came during the recent Amazon Prime Day event. Corsair said the results showed a promising start to the third quarter and second half of 2022. Sales for its products experienced robust growth compared to last year as components used to build gaming PCs grew 35% YoY.
The tech industry is still dealing with a post-Covid hangover that has caused sales, which skyrocketed during lockdowns, to come crashing to normal levels. Combined with the economic issues the world is facing, it's left companies with an abundance of unsold stock. The good news for customers, of course, is that many of these items, including Nvidia's once obscenely priced GPUs, are now being reduced to shift the excess units.
Corsair will release its second quarter 2022 results on August 4.