What just happened? The PC industry is one of several being hammered by the coronavirus outbreak, with shipments of motherboards and graphics cards likely to hit record lows by the end of the quarter. Laptop sales also dipped drastically last month, and the trend is expected to continue.
According to a Digitimes report, sales of motherboard and graphics cards fell 30 - 50 percent in China last month and aren't expected to show signs of improvement until at least July. When the outbreak began in China, factories in the country and its neighbors shut down, and local demand for components came to a near stop. While many have now reopened, the effects on the supply chain are still being felt.
It's not just the PC component market that's suffering; laptop sales among the five largest vendors were down 40 percent in February because of low demand and shipment delays. The only two companies that managed to ship more than one million notebooks during the month were Dell and Lenovo.
Image credit: South China Morning Post
Before the coronavirus, some believed motherboards and graphics cards would see a seasonal increase in demand during Q3 2020, but the lasting disruption could mean that prediction won't come to pass. It's likely that CPUs will also see reduced sales and demand.
Digitimes adds that AMD, Nvidia, and Intel are all expected to miss their target forecasts due to weaker sales in the first half of the year.
The drop in demand could result in companies offering discounts on their products to encourage more buying. We've already seen AMD do this with its Ryzen 3000 CPUs, which have had their prices reduced by $25 - $50. Some of the processors come with a three-month Xbox Game Pass, usually costing $29.99. The situation is also probably why Nvidia is delaying its GTC news and postponing the release of its Ampere-based graphics cards.