With China's recovery from the Coronavirus pandemic, it seems supply chains are slowly improving too, according to Microsoft and Nvidia.
With the understandable closure of many factories in a bid to stem the spread of COVID-19, various tech companies suffered when it came to supplies of relevant chips and components. In a statement to CNBC yesterday, Microsoft CEO Satya Nadella stated things are improving when it comes to supply, if not demand: 'the supply chains are all coming back. That is not our real issue. I think the bigger issue is what happens in Europe, the United States and other developed markets in the demand side going forward. But we feel good about where we are.'
This is a particularly poignant announcement given - in theory - the Xbox Series X will be launching at the end of this year and there were concerns about whether there would be sufficient supply of components to make this possible. Although, Nadella was also a little cautious about that, pointing out that 'we'll have to check back on it' when asked about hitting launch deadlines. If nothing else, we're guessing if the appetite and finances of consumers isn't there, it would make sense to delay a launch until things are more stable.
Still, it's a promising sign that there is light at the end of the tunnel.
Nvidia's Chief Financial Officer Colette Kress had similarly promising news during a fireside chat explaining that supply chains are due to recover 70-80 percent by the end of the quarter, with the majority of that focused on personal computing. Nvidia explained there's been increased demand for laptops, particularly in China, which is presumably down to the increase in working from home.
China's recent lack of new coronavirus cases has led to loosened restrictions, more shops and restaurants reopening, and life very slowly returning to normal. The growth in technology sales is presumably reflecting that.
The big loser so far? Apple which has suppliers and operations in the US, Italy, Germany, UK, South Korea, and Israel amongst other locations, meaning the firm is being hit from all angles.
Earlier this week, AMD and Intel explained that they still had adequate supplies of CPUs and were keeping on top of things, while also not adjusting their earnings guidance, suggesting a little optimism.
Potentially, the rise of home working could be aiding such efforts, with consumers flocking to purchase new technology. Providing they are able to get it safely delivered, that is.
July 1 2020 | 17:34