PALO ALTO, CA – Hewlett-Packard's plans to concentrate on business servers could have startling ramifications for the worldwide electronics supply chain, by spinning off or selling its Personal Systems Group and discontinuing WebOS tablet and smartphone products.

The PSG was HP’s largest business unit in the second quarter, with $9.6 billion (30.8%) in revenue. HP is expected to divest the unit, however, due to its relatively low growth and operating margins.

Speculation on potential buyers has thus far centered HP’s major PC competitors and certain Asia-based ODMs. HP’s PC market share in 2011 is 18%, placing it first in the world, ahead of Dell, Acer and Lenovo. If HP sells its PSG to Samsung, the latter’s market share would soar from 4% to 22%. Moreover, the component supply chain would be dramatically affected, as Samsung would likely leverage the acquisition to create a new channel for its memory components and batteries, thus pushing out a number of Taiwanese vendors.

If Lenovo were to purchase HP’s PSG, its market share would rise from 12% to 30%, surpassing Dell and Acer’s combined market share. (Dell and Acer currently rank second and third, respectively.)

Inventec, Quanta, Foxconn and Wistron, the major ODMs for HP’s notebooks, account for 25~30%, 30%, 20~25%, and 5% of HP’s shipments this year, respectively.

If HP sells PSG, Inventec is expected to suffer the most severe setback because HP totals 60% of Inventec’s NB shipments, says research firm TrendForce. HP’s WebOS tablet TouchPad is exclusively manufactured by Inventec.

If HP divides and sells part of its PSG, the potential client order decline is expected to mar ODMs’ revenues. On the other hand, since Quanta possesses the greatest client diversity among the ODMs, regardless of the final buyer for HP, Quanta will most likely continue to receive orders from this new client, according to the research firm.

In Foxconn’s case, HP and Dell account for almost 70% of its NB shipments in 2011. In 2012, however, the NB shipment ratio from HP is expected to increase, while Dell may decrease. Consequently, if HP’s orders also drop in 2012, it would affect Foxconn drastically, says TrendForce.

Foxconn dedicates one of its more than 12 production divisions exclusively to HP. A potential Foxconn acquisition of HP’s PSG would be influenced by the ODM’s other clients and a potential lack of capital. But given the aftershock if Samsung were to purchase PSG, Foxconn might feel the need to make a play.

On the other hand, Compal and Pegatron, both not currently included in HP’s supply chain, would mostly likely benefit from other companies’ acquisition of HP’s PSG.

HP’s PSG sale will not affect Taiwanese NB ODMs’ businesses as a whole because the cooperative system between brand vendors and ODMs has been established for years. Regardless of the final buyer, they will most likely outsource their production orders to Taiwanese ODMs. However, in the long run, it may change the dynamic between Taiwanese NB ODMs and affect the global PC ODM industry, according to the research firm.  

SAN JOSE – North America-based manufacturers of semiconductor equipment reported July orders dropped nearly 30% on a three-month average basis, according to SEMI.

ROCKVILLE, MD – The global computational fluid dynamics market in the electronics industry is expected to grow at a CAGR of 15.7% over the period 2010-2014, says MarketResearch.com.

One of the key factors contributing to this market growth is the adoption of CFD to reduce design and production costs. The global CFD market has also been witnessing the use of CFD to design advanced electronic equipment.

With the introduction of lower license costs and new licensing models, electronic companies such as Samsung and Panasonic have been adopting CFD software to simulate heat dissipation in electronic circuits and devices, says the firm.

The growing popularity of open source solutions is hindering the growth of this market. However, the use of CFD to reduce design and production costs is expected to keep driving it.

SANTA CLARA, CA – Apple shipped more than 13.5 million mobile PCs in the second quarter, for 136% year-over-year shipment growth, overtaking HP for the top spot, says DisplaySearch.

Nearly 80% of Apple’s mobile PC shipments were iPads, which reached over 10.7 million units, for 107% year-over-year growth. Apple’s total mobile PC shipments (notebook and tablet PCs) were 3.9 million units more than HP’s nearly 9.7 million units for the quarter.

Tablet PCs continue to be the engine of growth for the mobile PC industry, the firm says. Tablet PC shipments were up nearly 70% sequentially and over 400% year-over-year, with nearly 16.4 million units shipped in the second quarter.

Notebook PC shipments were down 2% sequentially, but up 2% compared to the same quarter last year, with nearly 48 million units shipped during the period.
A consumer notebook PC adoption slowdown continues to hold back the industry following a 2% year-over-year drop in shipments in the first quarter of 2011. Worldwide mobile PC shipments (including notebook and tablet PCs) reached 64.4 million in the second quarter, up 10% sequentially and 28% year-over-year.

Among the top five players, Acer experienced the largest decline in shipment growth, with a 4% sequential drop, and a decline of 12% year-over-year.

In the notebook PC category, Samsung and Dell had the fastest shipment growth, up 44% and 33% year-over-year, respectively. Dell was also up sequentially, with 27% shipment growth, as it continues to take advantage of a rebound in commercial market PC shipments. Samsung’s shipments fell 16% sequentially, as it was unable to build off of strong shipment results in EMEA and China. Still, Samsung was able to top first-quarter shipment levels in North America and Asia Pacific.

Tablet PC shipment results show that even after removing Apple from growth rate calculations, worldwide year-over-year tablet PC shipment growth reached 25%, and shipments of non-Apple tablets reached more than 5.6 million units for the quarter, according to DisplaySearch.