Dell says PC supply chain is back to normal, but chip shortages will have longer impact on server market

Dell believes the PC supply chain has largely returned to normal after a few years on a roller coaster of the COVID-19 pandemic. Tom Sweet, the company's chief financial officer, said there will always be issues affecting the consumer PC supply chain. But from an industry perspective, the current mode of operation is close to the historical norm. Unfortunately, as the chip shortage continues, the server market will take longer to soften its impact. Data map (from: DELL's official website) Overall, the company's business operations seem to be back on track again, the high demand brought about by the pandemic is slowing down, and the production pressure of manufacturers is lessened than before. In addition, as inventory grows, the cost of components will also be reduced. Earlier this month, IDC predicted that shipments of traditional PCs and tablets may not recover until 2024. The research firm blamed inflation, a weak economy and slowing demand after a surge in purchases over the past year (a combined two-year market impact). 2022 Q2 global PCD product forecast (Figure from: IDC) On the other hand, for the server market - affected by the continued shortage of semiconductors, things are relatively more complicated. Dell CEO Michael Dell said in a presentation at the Citi 2022 Global Technology Conference in New York that its infrastructure challenges are not over. The company was held back at some points, and shortages persisted. In addition, certain types of chips are more difficult to obtain, and delivery times have been delayed longer. The average lead time for semiconductors in August was 26.8 weeks, Bloomberg reported on Friday, citing data from tech trade finance firm Susquehanna International. That figure is only slightly one day shorter than a month ago, and doesn't appear to be doing much to help manufacturers in need. Finally, Dell CEO Tom Sweet predicts that the tightness in the server market may begin to ease in the fourth quarter of 2022.