Dell, HP say chip shortages will hit PC supplies this year

Dell Technologies Inc and HP Inc reported quarterly revenue that beat Wall Street estimates, as customers continued to shop for personal computers, even as pandemic-led restrictions eased in many parts of the world.

Both the companies warned that the ongoing computer chip shortage could impact their ability to meet demand for laptops this year. As per this the shares of Dell fell 1% and those of HP dropped as much as 6%. Dell Chief Financial Officer Thomas Sweet said in post earnings call that the component supply situation remains constrained. He also added that rising costs to procure these chips would hit its operating income. This leads to slightly lower revenue on a sequential basis.

According to IDC data, HP ranks second among global PC vendors. HP says that this shortage would limit its ability to supply personal computing devices and printers at least until the end of the year. Both the companies said that they were bullish on the overall market, expecting the surge in demand for laptops needed by people working and going to school remotely to continue.

According to preliminary data from research firm IDC, in the first quarter global shipments of PCs, the industry’s collective term for laptops and desktops, grew 55.2%. Revenue from its client solutions group, including desktops, notebooks and tablets, rose 20% to $13.31 billion, said Dell. HP’s PC-related sales rose 27% in the quarter ended April 30 and their notebook sales surged 47% from the same period a year earlier. In the first quarter, Dell’s revenue rose 12% to $24.49 billion. Overall revenue of HP is $15.9 billion. Both the companies which are leaders in this computing industry has beated its estimated amount, said the IBES data.