THE supply chain for personal computers is back to normal after years of logistics disruptions, Dell Technologies Inc CFO Tom Sweet said.
“There’s always going to be some issues in that chain, but in general from our perspective, it’s operating more like the historical norm,” Sweet said ON Thursday in an interview.
Many component costs are getting cheaper as availability has improved and demand has weakened. Dell is working on clearing its inventories before being able to take advantage of more favorable component prices, Sweet said. Many manufacturers are offering aggressive discounts to help clear inventory faster, mostly on consumer products, he said.
Supply chains issues for servers have been harder to shake due to semiconductor shortages, Sweet said. However, this tightness should begin to ease in the fourth quarter, he said.
Read more about the demand issues plaguing the software sector
Dell executives last month gave a gloomy outlook for computers and business infrastructure demand through at least the end of the year, predicting sales in the current quarter would decline year over year. Dell shares have dropped 21% in the two weeks since the company’s forecast, compared with about a 5% decline in the S&P 500.
In response to slowing demand, Dell paused most external hiring in June and has scaled back some expenses like travel, Sweet said. “There’s a lot of big macro things that we’re going to have to work our way through.” – BLOOMBERG