As we further enter spring, various trends are shaking the global technology sector. The widespread changes in global demand for personal computers and the supply of key semiconductor chips are having an impact on the stock market. Let's take a closer look:

Apple's Computer Shrinkage

After generally avoiding a decline in demand for its proprietary product line during the holiday season in the fourth quarter of 2022, it seems that Apple (AAPL) may feel the pressure of a decrease in enthusiasm for purchasing computers during the New Year.

In the fourth quarter of last year, Apple remained relatively unscathed in the decline in PC sales during the Christmas season, with shipments only decreasing by 2% compared to the industry average decline of over a fifth. However, the bottom line for this industry giant in the first quarter of 2023 was not very friendly, with shipments decreasing by 40% compared to the same period last year.

In addition, the industry's diseases are far from limited to apples. Other leaders in the computer market, such as HP (HPQ) and Dell (Dell), have also seen a significant decrease in shipments compared to the first quarter of 2023, with shipments decreasing by approximately 24% and 31%, respectively. Despite these declines, the stock prices of both companies remain attractive so far in 2023, with HP up more than 10% and Dell up 3%.

So, what is the reason for the significant reduction in computer users' desire to refresh their inventory of gadgets? According to some analysis, the current state of the PC industry is due to the aftershocks of the COVID-19 pandemic. In the era of widespread lockdowns and home orders, the demand for computers has surged, so the current sales figures will naturally be lower compared to the peak of the pandemic. Inventory may even remain above long-term trend levels until the end of the year.

With the overall industry's shipment volume weakening, Apple's stock value fell 1.6% on Monday. The development direction of Apple and the entire computer industry this year largely depends on the overall economic environment. It remains to be seen whether the overall market recovery can reignite consumer confidence, or if the recession atmosphere leads them to reconsider upgrading their current computer models.

Meiguang Power

Although overall PC sales may currently face a strong headwind, a key chip manufacturer seems to be fully utilizing current market conditions. On Monday, April 10th, Micron's stock price rose by over 8%, marking the company's best performance on Wall Street in over a year.

This chip manufacturer headquartered in Idaho specializes in producing two specific types of chips, called NAND and DRAM. The latter is a direct random access memory chip, usually aimed at personal computers, while the former is suitable for smaller small tools such as USB drives and smartphones.

One of Meguiar's most prominent competitors in the DRAM chip field is South Korean industrial giant Samsung. However, given the overall market price decline, Samsung announced to the public on Thursday, April 6th that the company will implement a significant production reduction to maintain the market value of its product line. Due to Samsung DRAM chips occupying approximately half of the market share, this decision is a blessing for industry peer Meguiar.

Recently, the decline in demand for personal computers mentioned above has affected the entire market for direct random access memory chips, as approximately 10% of DRAM chips are used for PCs. Given current market conditions, Meguiar has reduced production to prepare it to fully utilize Samsung's followers.

In addition, although Micron reported its largest ever loss of $2.3 billion on March 28th, some analysts believe that demand for DRAM chips used in smartphones and data centers may boost prices in the coming months. It is not yet known whether Meiguang stock can sustain yesterday's heavyweight market performance. (Source: Market Observation)

In recent years, the entire technology industry has experienced multiple ups and downs, as it is closely related to the overall economic situation. The uncertainty surrounding the recent and medium-term trends in market volatility remains high, and it is anyone's guess what will happen next for technology giants.