AI Reshapes Consumer Electronics: AI PCs Poised to Spark a New Technological Revolution
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What is the future innovation direction for personal computers (PCs)? AI PCs have become the shared choice of major brands.
Intel CEO Pat Gelsinger recently set a target: to achieve shipments of over 100 million AI PCs by 2025. Lenovo, meanwhile, stated that it will launch AI PCs in the second half of next year.
AI PCs, or artificial intelligence personal computers, deeply integrate AI technology with PCs. These PCs will be equipped with processors offering higher computational power and incorporate multimodal algorithms to redefine the PC experience.
In terms of functionality, AI PCs are not only more efficient and smoother (with features like instant-on, voice assistants, and intelligent temperature control) but also smarter in personalized experiences and proactive services (such as smart displays, intelligent protection, and content creation). As productivity tools, AI PCs are expected to become hybrids of terminals, edge computing, and cloud technology, meeting the demands of new generative AI workloads.
Fu Tianzi of Everbright Securities noted that, considering the extension of AI computing power from the cloud to the edge, AI PCs and AI smartphones may become the transformative direction for the consumer electronics industry in the AI era.
Fang Jing of Minsheng Securities stated that major PC manufacturers are actively exploring new forms of AI PCs. With the promotion of AI applications by companies like Microsoft and the launch of CPUs with integrated AI modules by Intel, AMD, and Qualcomm, AI PC products from brands like Lenovo, HP, and Dell are expected to emerge successively, potentially sparking a wave of AI adoption in PC terminals.
According to Sigmaintell's forecast, 2024 will be the first year of mass shipments for AI PCs. It is projected that global shipments of AI PC systems will experience rapid growth from 2024 to 2027, reaching approximately 13 million, 53 million, 110 million, and 150 million units, respectively. Over the next five years, the global PC industry will steadily transition into the AI era.
What supports this prediction? Based on insights from multiple institutions, three main factors stand out: the PC market recovering from its downturn, the maturation of AI application ecosystems driving new demand, and active industry chain preparations.
IDC data shows that global PC shipments in Q3 reached 68.2 million units (a 7.6% year-on-year decline), with shipments in the first three quarters at 56.9 million and 61.6 million units, respectively, showing consecutive quarter-on-quarter growth. IDC believes that this sequential growth has slowed the annual decline rate, and channel inventories are nearing healthy levels, indicating that the market has bottomed out.
Guoyuan Securities notes that the consecutive quarter-on-quarter increase in PC shipments reflects strong back-to-school season demand while also signaling that the PC market has emerged from its low point. Additionally, demand for new AI-enabled PCs is growing, with AI PC shipments expected to rise in 2024. Given the cost of AI-related chips, the average price per PC is likely to increase.
Minsheng Securities also states that as market demand recovers and inventories gradually normalize, the PC market adjustment is largely complete. Q4 2023 is expected to continue the recovery trend, with the integration of generative AI models like Copilot in PC applications poised to drive the AI PC wave.
In terms of the industry chain, AI-capable PCs must be equipped with dedicated chipset or modules, and chip manufacturers are focusing on AI modules for PCs. Intel is set to launch a new generation of PC processors with a built-in VPU as a dedicated AI acceleration engine, enabling efficient AI model execution. AMD has introduced the Ryzen 7040, an x86 processor with embedded AI hardware, featuring the XDNA AI accelerator engine to promote lightweight, low-cost, and high-performance CPU development. This engine is already supported in Windows 11. Qualcomm has also released the Snapdragon X Elite, a next-generation PC processor for Windows 11, equipped with an NPU unit for generative AI tasks.
According to Digitimes, the laptop supply chain indicates that while 2023's peak season was underwhelming, the outlook for 2024 is optimistic. The industry believes Chromebooks, business laptops, and AI PCs will be the three major highlights in 2024, with AI PCs expected to be a key focus in the second half of the year, driving overall laptop industry growth.
From an investment perspective, Wang Cong of Guotai Junan Securities noted that leading companies are consolidating their positions in the AI PC era, benefiting upstream chip suppliers, component manufacturers, and ODM assemblers. Minmetals Securities recommends focusing on three areas: global PC brand leaders like Lenovo; PC ODM manufacturers such as Huaqin Technology and Wingtech; PC semiconductor companies including Montage Technology, Tongfu Microelectronics, Demingli, Xccelerate, Chipsea, Longsys, and Lechip; and PC component suppliers like Han's Laser, Tonly Precision, Shenghong Technology, Chunqiu Electronics, Guangda Tongchuang, and Huichuangda.