Optimism But…
There was a qualifier on those estimates which was “barring the shortages of IC chips”, and a 2nd qualifier on 2nd quarter results which stated that, “due to the shortage of some key materials”, shipments of traditional and gaming monitors will stay flat in the quarter. Given that the company reported 36.5m in April Sales, a flat quarter would entail the next two months being $35.8m each, and while these are still very positive results, it would imply that June could be a down month y/y. This is an issue that plagues many companies in the CE space who are now facing shortages and much harder y/y comparisons, and while we emphasize that results such as these are still quite strong, unless component shortages go away in the 2nd half, the comparisons will continue to get harder, and even more so in 1Q of next year.
Make what you will with the data, but even with continued demand strength, it seems that the high growth rates seen over the last year or so will be much harder to achieve in 2H, and given that there is little additional available semiconductor capacity coming on line in the next few months, the only way component shortages will ease would be against lower demand. We expect stockpiling components has been part of the demand picture, which could slow and ease some demand related shortages, but if that stocking was actually ‘phantom demand’, the real growth rates in CE would become apparent, and they would likely lead to the weak comparisons mentioned above. While we expect a less extreme scenario, we have to consider what we see on a day-to-day basis, and without seeming all ‘doom and gloom’ are a bit more cautious toward the CE space than a quarter ago, despite the strong 1Q numbers. JOHO.