Ian Nethercot, MCIPS, Supply Chain Director at Probrand shares his learnings on the latest IT supply chain developments.
With lockdowns easing globally, the global IT supply chain has begun to move again, and many product lines that were in constraint are showing glimmers of regaining stock.
However, many core homeworking product lines, like webcams, are still out of stock and there is no indication as to when stock will reappear. As for price, watch for global economic influencers, like exchange rates, which will impact end-product pricing down the line as shipments move through geographies.
To help navigate the ups and downs and maintain a clear view of what represents a fair price, here are some of the latest developments and major movements that are influencing key IT product categories.
Exchange rate
The Euro started June at its lowest point for the month against the USD (1.1127), climbing steadily to 1.1319 on Friday June 5. It reached a monthly high of 1.1362 on June 10 before falling to 1.1176 on June 20, broken only by a short rally on June 16. From there, it rose to 1.1296 but couldn’t sustain its upward momentum and coasted in at 1.1228 on June 30.
The Euro’s fortunes against the GBP showed a steady increase for most of the month despite a spiky start. It began at 0.8951 before dipping to 0.8901 the following day and then rising to 0.8966 on June 4. It sunk again to a monthly low of 0.8894 on June 8 before beginning a sustained rally on June 10. Apart from a small dip on June 16, it then gained consistently to come in strong at 0.9109 at the end of the month.
Phones and Tablets
Gartner tracked a 20% YoY dip in global smartphone sales in Q1 due to the pandemic, with the top vendors (Samsung, Huawei, Apple, Xiaomi, and OPPO) all seeing double-digit declines. It was the worst decline ever, the company added. Things don’t look much better in the future, with one in three planning to spend at least 20% less on their next smartphone according to a survey by Counterpoint.
Traditional PCs
The PC gaming market dropped 10.2% YoY in Western Europe during Q1, said IDC, but not because of poor demand. People would love a spot of Red Dead Redemption while furloughed at home, but supplies are the problem; retailers just can’t get the high-end notebooks they need.
That reflects data from CONTEXT’s new COVID-19 price index, which saw notebook selling prices strengthening across Western Europe. This metric takes the average price of each product, indexes it at 100 for week zero of the pandemic, and then tracks it. The index for notebook prices in the UK hit 102.3 12 weeks into the pandemic period.
IDC has predicted that pent-up demand should stoke an 11.8% growth in Q2 as supplies pick up, but the fun times won’t last long. Console launches and financial constraints will soften consumer demand in 2H, it warned.
Memory
Memory drove much of the growth that analyst Omdia saw among the top ten chip makers, with the three leaders in that space (Samsung, SK Hynix, and Micron) increasing revenues 1.1% QoQ in Q1. The data processing market drove demand for NAND flash memory in solid-state drives, the company noted.
NAND flash prices were in short supply during the first half of 2020. According to TrendForce, this was driven by a demand for cloud services and circumstances of panic buying within the supply chain. Meanwhile, SSDs dominated demand. TrendForce predicted a reduction in demand for enterprise SSDs but increases in other areas such as retail and smartphones, leading to limited changes in NAND flash prices in Q3.
Monthly statistics
Stock increases experienced a high of 23,604 on June 9. Stock decreases saw their bumps on June 10 to 29,496 and again on June 25, reaching a high of 19,659.
Price increases hit a high of 38,457 on June 2, across a variety of product categories. Meanwhile, price decreases hit a whopping high of 96,434 on June 24.
Learn more from Ian here.
