Acer India expects supply disruptions to end

Abhishek Law Kolkata | Updated on May 07, 2021

Sudhir Goel, Chief Business Officer, Acer India

Despite demand rise, supply chains were stretched leading to global chips shortage

Laptop and PC-maker, Acer India, is expecting supply disruptions – particularly chip shortages – to be over by the second half of this year, in line with the time when demand for devices is expected to peak in the country.

A second wave of the Covid-19 infections, lockdowns across key markets, disruptions in off-line retailing and a parallel increase in demand – driven by extended work from home (WfH), online classes, and so on – have led to a peculiar situation where despite a demand rise, the supply chains have been stretched, leading to a global chip shortage.

The laptop market was among the last to be affected by the global chip shortage towards the end of 2020, and the supply chains have been working overtime to address the situation.

While it couldn’t be contained for the first quarter of 2021, however, there are better supplies for the second quarter and there could be complete recovery by the end of the year. According to Sudhir Goel, Chief Business Officer, Acer India, technology adoption was up post the pandemic. “Previously, hybrids and high-end gaming laptops were prime demand drivers in the segment. But despite the high demand, chip shortages and supply chain constraints continued across players. Replacement markets are also looking up,” he said.

“A pan-India lockdown deferred sales, but demand was intact. Sales shot up (as opening up happened) leading to the supply chain being stretched. We came up with a situation where we were unable to service demand,” he told BusinessLine adding, “Now with lockdowns, it is very likely that the demand will be shifted to some of the later quarters of the year, perhaps second half and maybe coinciding with the time when chip shortages will recede.”

Service & sales

For instance, in April 2021, Acer was still servicing close to 50-55 per cent of the queries or demand similar to the January to March period. Its retail (offline) to online sales stands at a 50:50 ratio. “The demand-supply gap is reducing,” Goel added.

The company is also exploring the possibility of taking up the Production-linked Incentive (PLI) scheme of the Centre. Desktops and all-in-ones are currently manufactured at the company’s India facility in Puducherry.

Published on May 07, 2021

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