The global laptop and PC market is gradually recovering, coupled with the rising trend of AIPC. Laptop brands, including Acer and ASUS, as well as major contract manufacturers like Foxconn and Quanta, have all released positive outlooks for 2024.

Semiconductor giants such as Intel, NVIDIA, AMD, Qualcomm, and others actively entered the AI PC chip market in the second half of 2023, positioning themselves strategically. Both laptop brands and terminal manufacturers have expressed expectations for this development.

Acer

Jason Chen, Chairman and CEO of Taiwan-based computer manufacturer Acer, stated on November 30th that they are currently tallying the sales performance of Acer during Black Friday and Cyber Monday, and the current results are satisfactory. Looking ahead to the PC industry next year, from an overall economic perspective, there are still many uncertain factors, but it appears to be better than this year.

Chen further pointed out that the impact of the pandemic has passed, inventory digestion has also concluded, and entering the traditional seasonal performance, the specific application of generative AI will bring a new wave of demand stimulation.

Regarding AI PCs, Chen emphasized that the transition to AI PCs will be a gradual process rather than a sudden occurrence. He anticipates this transformation will take place in both commercial and consumer markets in the future.

ASUS 

According to UDN’s report, ASUS, another major Taiwanese laptop manufacturer, emphasized the significance of AI PCs during its November investor conference. Co-CEO, S.Y. Hsu, highlighted that AI PCs represent a crucial turning point for the industry, promising a significant improvement in user experience and ushering in a new era for the PC industry.

While he acknowledged that consumer acceptance of AI PCs would take time to increase, he predicted that the penetration rate of AI PCs would reach single digits in 2024 and double digits in 2025, depending on the user experience and technological maturity of AI PCs next year.

Foxconn

For Taiwanese electronics contract manufacturer Foxconn, the outlook for the PC industry in the coming year is described as “very good” by Chiang Chih-Hsiung, General Manager of the B Group and Digital Health at Foxconn.

This indicates Foxconn’s positive expectations for performance in the PC-related industry. Foxconn had previously emphasized that, in addition to AI servers, it would collaborate with customers to expand its presence in the AI PC sector in 2024.

Quanta

In a public interview on November 30th, Chairman Barry Lam of Taiwanese electronics manufacturer Quanta discussed the overall outlook for the next year, emphasizing the role of generative AI in shaping future technological developments.

With the rapid growth in AI computing power demand, the market conditions for next year are quite optimistic. Lin is particularly bullish on the future prospects of three major products: AI PC, AI servers, and AI automotive electronics, with a special emphasis on the significant growth potential of AI PCs.

Quanta is optimistic about the growth momentum in this sector, especially with Microsoft set to launch the latest Windows featuring AI functions next summer. Quanta envisions continued collaboration with GPT in the future for PCs.

TrendForce’s Insight

TrendForce reports the global shipment of notebooks is expected to reach 167 million units in 2023—a YoY decrease of 10.2%. However, with inventory pressures easing, the notebook market is anticipated to return to a balanced supply and demand cycle in 2024. Overall shipment volume is forecast to reach 172 million units, marking a YoY increase of 3.2%.

As for AI PC, TrendForce believes that due to the high costs of upgrading both software and hardware, early development will be focused on high-end business users and content creators. This targeted group has a strong demand for leveraging AI processing capabilities to improve productivity efficiency and can also benefit immediately from related applications, making them the first-generation primary users.

The emergence of AI PCs is not expected to necessarily stimulate additional PC purchase demand. Instead, most upgrades to AI PC devices will occur naturally as part of the business equipment replacement cycle projected for 2024.

Nevertheless, looking to the long term, the potential development of more diverse AI tools—along with a price reduction—may still lead to a higher adoption rate of consumer AI PCs.

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• Key Development Period for AI PCs in 2024; Global Notebook Market Set to Rebound to Healthy Supply-Demand Cycle with an Estimated Growth Rate of 3.2%, Says TrendForce

(Photo credit: Pixabay)

According to the news from Chinatimes, Asus, a prominent technology company, has announced on the 30th of this month the release of AI servers equipped with NVIDIA’s L40S GPUs. These servers are now available for order. The L40S GPU was introduced by NVIDIA in August to address the shortage of H100 and A100 GPUs. Remarkably, Asus has swiftly responded to this situation by unveiling AI server products within a span of less than two weeks, showcasing their optimism in the imminent surge of AI applications and their eagerness to seize the opportunity.

Solid AI Capabilities of Asus Group

Apart from being among the first manufacturers to introduce the NVIDIA OVX server system, Asus has leveraged resources from its subsidiaries, such as TaiSmart and Asus Cloud, to establish a formidable AI infrastructure. This not only involves in-house innovation like the Large Language Model (LLM) technology but also extends to providing AI computing power and enterprise-level generative AI applications. These strengths position Asus as one of the few all-encompassing providers of generative AI solutions.

Projected Surge in Server Business

Regarding server business performance, Asus envisions a yearly compounded growth rate of at least 40% until 2027, with a goal of achieving a fivefold growth over five years. In particular, the data center server business catering primarily to Cloud Service Providers (CSPs) anticipates a tenfold growth within the same timeframe, driven by the adoption of AI server products.

Asus CEO recently emphasized that Asus’s foray into AI server development was prompt and involved collaboration with NVIDIA from the outset. While the product lineup might be more streamlined compared to other OEM/ODM manufacturers, Asus had secured numerous GPU orders ahead of the AI server demand surge. The company is optimistic about the shipping momentum and order visibility for the new generation of AI servers in the latter half of the year.

Embracing NVIDIA’s Versatile L40S GPU

The NVIDIA L40S GPU, built on the Ada Lovelace architecture, stands out as one of the most powerful general-purpose GPUs in data centers. It offers groundbreaking multi-workload computations for large language model inference, training, graphics, and image processing. Not only does it facilitate rapid hardware solution deployment, but it also holds significance due to the current scarcity of higher-tier H100 and A100 GPUs, which have reached allocation stages. Consequently, businesses seeking to repurpose idle data centers are anticipated to shift their focus toward AI servers featuring the L40S GPU.

Asus’s newly introduced L40S GPU servers include the ESC8000-E11/ESC4000-E11 models with built-in Intel Xeon processors, as well as the ESC8000A-E12/ESC4000A-E12 models utilizing AMD EPYC processors. These servers can be configured with up to 4 or a maximum of 8 NVIDIA L40S GPUs. This configuration assists enterprises in enhancing training, fine-tuning, and inference workloads, facilitating AI model creation. It also establishes Asus’s platforms as the preferred choice for multi-modal generative AI applications.

(Source: https://www.chinatimes.com/newspapers/20230831000158-260202?chdtv)

According to a report by Taiwan’s Economic Daily, a trend is taking shape as computer brand manufacturers venture into the AI server market. Notably swift on this path are Taiwan’s ASUS, Gigabyte, MSI, and MITAC. All four companies hold a positive outlook on the potential of AI server-related business, with expectations of reaping benefits starting in the latter half of this year and further enhancing their business contributions next year.

Presently, significant bulk orders for AI servers are stemming from large-scale cloud service providers (CSPs), which has also presented substantial opportunities for major electronic manufacturing services (EMS) players like Wistron and Quanta that have an early foothold in server manufacturing. As the popularity of generative AI surges, other internet-based enterprises, medical institutions, academic bodies, and more are intensifying their procurement of AI servers, opening doors for brand server manufacturers to tap into this burgeoning market.

ASUS asserts that with the sustained growth of data center/CSP server operations in recent years, the company’s internal production capacity is primed for action, with AI server business projected to at least double in growth by next year. Having established a small assembly plant in California, USA, and repurposing their Czech Republic facility from a repair center to a PC manufacturing or server assembly line, ASUS is actively expanding its production capabilities.

In Taiwan, investments are also being made to bolster server manufacturing capabilities. ASUS ‘s Shulin factory has set up a dedicated server assembly line, while the Luzhu plant in Taoyuan is slated for reconstruction to produce low-volume, high-complexity servers and IoT devices, expected to come online in 2024.

Gigabyte covers the spectrum of server products from L6 to L10, with a focus this year on driving growth in HPC and AI servers. Gigabyte previously stated that servers contribute to around 25% of the company’s revenue, with AI servers already in delivery and an estimated penetration rate of approximately 30% for AI servers equipped with GPUs.

MSI’s server revenue stands at around NT$5 billion, constituting roughly 2.7% of the company’s total revenue. While MSI primarily targets small and medium-sized customers with security and networking servers, the company has ventured into the AI server market with servers equipped with GPUs such as the NVIDIA RTX 4080/4090. In response to the surging demand for NVIDIA A100 and H100 AI chips, MSI plans to invest resources, with server revenue expected to grow by 20% to NT$6 billion in 2024, with AI servers contributing 10% to server revenue.

MITAC ‘s server business encompasses both OEM and branding. With MITAC’s takeover of Intel’s Data Center Solutions Group (DSG) business in July, the company inherited numerous small and medium-sized clients that were previously under Intel’s management.

(Photo credit: ASUS)

According to TrendForce’s latest research, global NB shipments are forecasted to drop by 5.8% YoY to around 177 million units. However, the downtrend in NB shipments is starting to moderate, and the projected figure for 2023 is expected to represent the lowest point before 2025. Currently, inventory corrections for components and whole devices are taking place in the global supply chain for NBs. Prices are also being cut substantially across sales channels, and PC OEMs have scaled back component procurements. There is a chance that the NB market will return to its usual cyclical pattern and show growth during 2H23, when back-to-school and holiday-related promotions are expected to boost device sales.

However, this scenario will depend on two factors. First, PC OEMs will have been able to effectively get rid of the existing stock of NBs belonging to the older generations during 1H23. Second, global inflation will ease as 2023 progresses. Currently, the IMF forecasts that the rate of global inflation will slide down to 6.5% in 2023, compared with 8.8% in 2023. Such development will help raise the consumer spending related to electronics. All in all, notable inventory corrections and the reduction of inflationary pressure will allow the NB market to leave the gloomy situation of 2022 and get back to upbeat state of quarter-to-quarter shipment growth.

Market Segments for Commercial and Consumer NBs Will Both See Decline in 2023, Chromebooks, Gaming NBs, and Creator NBs Will Become Main Demand Drivers

Looking at the various segments of the NB market, unit shipments and market share are expected to drop for both commercial NBs and consumer NBs. Conversely, Chromebooks will grow in terms of shipments and market share despite various headwinds. In 1H23, mature regional markets such as the US and emerging regional markets such as Indonesia and India will be releasing tenders for Chromebook for educational uses. Turning to gaming NBs, their global shipments are forecasted to increase by 8.3% YoY to 17.45 million units for 2023 thanks to the seasonal demand surge in 2H23. As for creator NBs, the market for them is growing because professional content creators want to purchase a “mobile workstation” in place of a high-end gaming NB for tasks such as building 3D models and processing large amounts of multimedia files. Global shipments of creator NBs are forecasted to rise by 24.9% YoY to around 437,000 units for 2023.

(Note: “NB” stands for notebook or laptop computer.)

Since corrections continue to occur in the current global notebook computer market as a result of the “overbooking” bubble, destocking of terminal products is expected to continue until the first half of 2023, when cyclical growth momentum is likely to return to the market.

TrendForce forecasts that global notebook computer market shipments will reach 191 million units in 2022, falling 22.3% YoY. The first quarter of 2022 benefitted from a backstop created by market demand for business model notebooks, laying the foundation for a 2022 “not-off off-season.” However, the global notebook computer market encountered zero-COVID control measures in Shanghai, China, resulting in a supply chain suspension in 2Q22. In addition, rising inflation stalled global consumer electronics market demand. Shipment volume is only expected to be approximately 44.35 million units up until 4Q22, demonstrating that 2022 has reversed the established market norm, replacing “QoQ growth” with “QoQ decline.”

Global notebook computer market shipments will reach 177 million units in 2023, cyclical growth momentum is expected to play an important role

Looking back on 2022, due to the reversal of demand in the global notebook computer market beginning in 2Q22, the overbooking bubble caused by the COVID-19 pandemic has corrected quarter by quarter, resulting in a sharp increase in inventory levels at PC brands. Therefore, accelerating the destocking of notebook computer products is the current focus of PC brands with individual sales channels all adopting promotional strategies based on substantial price cuts. If the inventory level of terminal products can be reduced, it will be beneficial for PC brands to continue purchasing semiconductors and other materials in 2023 and pessimistic market conditions will not spread to the foundry industry, which is conducive to a positive cycle.

Movements in the current global laptop market to correct for the overbooking bubble will continue until the first half of 2023. The second half of 2023 coincides with cyclical growth momentum from back-to-school shopping and holiday seasons in major consumer electronics markets such as the United States, Europe, China, and Japan, and the global notebook computer supply chain is expected to ramp up supply from 2Q23 to reproduce a demand scenario wherein the second half of previous years surpassed the first half. Global notebook computer market shipments is estimated to reach 177 million units in 2023, an annual decline of approximately 7.7% and the proportion of shipments in terms of the first half compared to the second half of the year will be approximately 47:53.

（ Image credit: pikwizard）