Prices Up…
Taiwan based Tyntek (2426.TT) has announced it will raise prices between 10% and 15% for orders that it is carrying on its books this quarter. The company is running its 5” production line at full utilization and expects to start production on its new 6” line in July. While such a price hike is not unusual given the inventory building that IT display backlight producers have been doing to insure supply. What makes this price hike a bit unusual is that it is the 2nd increase that Tyntek has put in place this year, having instituted a 5% to 10% hike in the 1st quarter. Tyntek produces both LEDs and Silicon sensors and through a subsidiary, produces high brightness LED products and drivers for the automotive space and has been seeing progressively higher sales since the pandemic began last year.
Taiwan based Pegatron (4938.TT), a well-known OEM/ODM for a number of highly visible CE producers has reduced its forecast for shipment growth in 2nd quarter from 25% to 30% to 5% to 10% due to a worsening shortage of components and semiconductors, while Asustek (2357.TT) seems to want it both ways, citing a positive view on order visibility for PCs through the end of this year with sales growth of 5% to 10% in 2Q, but also sees the shortage worsening. Asustek cited audio codec chips as a new problem for supply and indicated that it has accepted recent price increases for components and will make price adjustments itself to compensate., The company did raise concerns that overbooking was an issue behind the rising shortages and was making it difficult to understand real demand, but while the intellectualizing over price increases continues, there is still considerable competition among semiconductor fab customers, particularly automotive customers, that are pushing prices progressively higher.
More specifically, notebook prices in China and most other regions have been rising quickly, with high-end Huawei (pvt) models up 9.4% in 1Q, both ACER (ACER) and Asustek up between 5% and 10% for most models, and Lenovo (992.HK) increasing prices on some models by as much as 20%. With 2Q the peak season for educational bidding, notebook demand is expected to be up 10% q/q, assuming component availability, however as noted above, limitations as to components and silicon could push that timeframe out by another month. Hopefully IT device producers don’t begin to strip down features on new models to offset large price increases during the ‘back-to-school season in the fall, although there is a chance that notebook demand could be reduced a bit once the educational contract season ends. Many of those contracts were signed last year before prices increased and vaccination programs in the US were found to be successful enough to allow a return to in-person schooling this year.
Taiwan based Pegatron (4938.TT), a well-known OEM/ODM for a number of highly visible CE producers has reduced its forecast for shipment growth in 2nd quarter from 25% to 30% to 5% to 10% due to a worsening shortage of components and semiconductors, while Asustek (2357.TT) seems to want it both ways, citing a positive view on order visibility for PCs through the end of this year with sales growth of 5% to 10% in 2Q, but also sees the shortage worsening. Asustek cited audio codec chips as a new problem for supply and indicated that it has accepted recent price increases for components and will make price adjustments itself to compensate., The company did raise concerns that overbooking was an issue behind the rising shortages and was making it difficult to understand real demand, but while the intellectualizing over price increases continues, there is still considerable competition among semiconductor fab customers, particularly automotive customers, that are pushing prices progressively higher.
More specifically, notebook prices in China and most other regions have been rising quickly, with high-end Huawei (pvt) models up 9.4% in 1Q, both ACER (ACER) and Asustek up between 5% and 10% for most models, and Lenovo (992.HK) increasing prices on some models by as much as 20%. With 2Q the peak season for educational bidding, notebook demand is expected to be up 10% q/q, assuming component availability, however as noted above, limitations as to components and silicon could push that timeframe out by another month. Hopefully IT device producers don’t begin to strip down features on new models to offset large price increases during the ‘back-to-school season in the fall, although there is a chance that notebook demand could be reduced a bit once the educational contract season ends. Many of those contracts were signed last year before prices increased and vaccination programs in the US were found to be successful enough to allow a return to in-person schooling this year.
Tyntek - Monthly Sales - 2019 - 2021 YTD - Source: SCMR LLC, Company Data
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