We Can’t Ship Enough Product to the US Due to Backed-Up Ports

PC maker Asus says it’s struggling to ship enough products to US retailers due to backed up naval ports and a shortage of truck drivers in the country.

“Therefore, inventory in the US has actually gotten worse and faced more constraints,” said Asus Co-CEO Samson Hu in an earnings call last week. “In our October earnings, we were actually impacted a little bit by the US inventory issues because our shipments were not able to be delivered to our customers.”

The news certainly doesn’t bode well for the PC industry or the holiday shopping season. In response, the Biden administration has been working with US ports, trucking companies, and retailers to unload more cargo containers to help solve bottlenecks in the country’s supply chain.

The other problem facing Asus and the electronics industry has been the ongoing chip shortage, which has prevented PC makers from pumping out more products. “Overall the industry faces demand outstripping supply,” Hu added. 

But in some good news, Asus has been noticing improving supplies for PC desktop parts. “The gap between demand and supply of IC (integrated circuits), motherboard and graphics cards has started to decrease. Previously, the gap was at 20 to 30%. Now it has decreased to roughly under 20%. This is the current situation,” he said. 

Globally, the company’s product inventories are also up due to the shortages slightly easing. “We previously saw inventories at only 50%, and now they have returned to 70% of pre-COVID levels,” Hu said. However, inventory levels in the US have been worse due to the port blockages.

In addition, the company is still struggling to source certain laptop-focused components, including USB-power controllers, battery chargers, and sound amplifiers. Asus’s key supplier for these components doesn’t plan on expanding its manufacturing capacity for the components until next year’s fourth quarter. “So before then, they will have very long lead times, and very unclear visibility,” Hu said. 

The other bad news involves price increases due to the tight supplies for computer chips. The company plans on hiking up the costs through a new wave of Windows 11 products launching early next year. “We will see an upgrade in product and specifications, therefore, the cost will also be suitably reflected in these upgrades, and passed onto our consumers,” he said.