China’s Lenovo says global chip shortage will persist as profits increase

The company said it was able to outpace the market by securing a greater supply of components than its peers, but acknowledged that the lack of chips “caused delays in order fulfillment and significant back-logged orders on PCs, smartphones and servers.” was being made.”

CEO and chairman Yang Yuanqing told Reuters in an interview that his earlier prediction that the shortfall would remain unchanged until at least the first half of 2022.

“The shortfall is driven by strong demand, especially in the IT sector and in the electric vehicle sector,” he said.

Shares of the company fell as much as 5% after its results, which Guotai Junan analyst Jin Yu said, adding that the semiconductor crunch, which has affected goods ranging from automobiles to home appliances, was affecting PC shipments around the world. Used to be.

Research consultancy Gartner said that growth in worldwide PC shipments slowed in the September quarter of-2021 last month as the easing of anti-virus measures prompted consumer and educational spending to shift from PC to other priorities and chip. Shortage disrupted laptop shipments.

Gartner said Lenovo retained the title of largest worldwide PC vendor by shipments, although its growth has slowed after five consecutive quarters of double-digit growth. In the third quarter, Lenovo’s global market share increased by 1.8% to 23.7%.

Yang said Lenovo is helped by its unique hybrid supply chain model, which sources components from external and in-house manufacturing, and while it has seen a decline in educational PC demand, commercial demand remains strong.

Earlier on Thursday, the company reported profit on account of equity holders for the quarter ended September 30, which rose to $512 million versus $310 million in the same period a year ago.

Revenue rose 23% to $17.9 billion, according to Refinitiv data, slightly higher than 9 analysts’ average estimates of $17.3 billion.

Shares of Lenovo are up more than 70% over the past year, despite concerns about chip supply, but investors were shocked last month when the company sold its 10 billion yuan ($1.56 billion) stock in Shanghai. Withdrawn the list abruptly.

Yang said factors such as market conditions and the listing process were behind the decision, adding that the move would not hurt his business.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.