Demand for Low-End Laptop CPUs is Tanking

As the world recovers from the pandemic, the PC industry experienced its biggest quarter-over-quarter decline in shipments for laptop CPUs, according to a research firm.  

The decrease occurred during this year’s third quarter when shipments for laptop CPUs fell by more than 18 million units from Q2, according to Mercury Research. 

Driving the decrease was plummeting demand for low-end laptop CPUs, such as Intel Celeron and AMD Athlon processors, which declined by more than 50 percent from Q2. Dean McCarron, the president for Mercury Research, called the decline “the worst on-quarter downturn for mobile CPUs in the history of the PC CPU market.” 

“The pullback on entry-level CPUs has no connection to the chip shortage,” he told PCMag in an email. “If anything it’s probably helping other markets as some of those components could be used in other PCs/products.”

Instead, he blamed the downturn on evaporating demand for entry-level laptops such as Google Chromebooks, which are particularly popular in the education market. COVID-19 and the need to study at home caused sales for Chromebooks and other notebooks to soar last year, which catapulted PC shipments to levels not seen in a decade. 

Mercury Research’s own data shows entry-level laptop CPUs “averaged more than 180 percent on-year growth each quarter from Q4, 2020 through Q2, 2021,” McCarron said. But with the pandemic now waning, demand for the products has been quickly drying up. Meanwhile, shipments for processors geared for desktops, servers and IoT devices remain robust.

“Some pullback was expected, but the return to pre-COVID volumes was instantaneous rather than gradual,” he added. Other research firms including Canalys also report demand for Chromebooks has taken a sharp dive in recent months. 

McCarron added: “Due to the decline in low-cost entry level shipments, the market average CPU selling price increased the most on-quarter in 23 years.” The average selling price is now at $168, up from $151, according to Mercury Research’s stats.