The market of microprocessors for PCs has hit the new record levels of unit shipments in the third quarter of 2008. It looks like Intel Atom processor aimed at low-power and ultra low-cost applications has boosted the market substantially, even though other chips also faced increase of shipments, according to IDC market tracking firm. But the outlook for future does not look too good.

Worldwide PC processor unit shipments grew 14.0% quarter-over-quarter (QoQ) and 15.8% year-over-year (YoY); market revenue grew 7.6% QoQ and 4.1% YoY to $8.3 billion. Intel’s new Atom processor made a notable difference in the overall market performance; without Atom, unit shipments grew 8.3% QoQ and 8.7% YoY.

“Not considering the effects of Atom, the overall market still grew at a decent pace in the third quarter. Intel's and AMD's shipments grew at a rate only slightly slower than typical for a third quarter, and seasonal demand appeared reasonable up until September. By segment, while the mobile processor segment grew aggressively, the server segment was soft,” said Shane Rau, director of semiconductors: personal computing research at IDC.

In terms of processor vendor shares, on an overall unit basis, Intel earned 80.8% market share, a gain of 1.1%, AMD finished with 18.5%, a loss of 1.2%, and Via Technologies earned 0.6%. It is unclear whether Atom is to praise for Intel’s gains or the reason why AMD lost 1.2% of the market is stronger mainstream mobile lineup at Intel.

In the desktop PC processor segment, Intel and AMD earned 73.5% and 26.4% share respectively; share changes were negligible. In the mobile PC processor segment, Intel earned 87.4% share, a gain of 0.8%, AMD finished with 11.5%, a loss of 1.1%, and Via earned 1.2%, a gain of 0.3%. In the PC server/workstation processor segment, Intel finished with 85.6% market share, a loss of 0.6% and AMD earned 14.4%, a gain of 0.6%.

Due to the market's strong performance through the first three quarters of 2008 and anticipated high volume of Atom processors, IDC has raised its PC processor market unit forecast for this year to 18.0%. However, the worldwide demand environment looks weak, and both Intel and AMD indicated an uncertain outlook for the market. As a result, IDC is conservative about 2009 and will be lowering its upcoming unit forecast for the year.

Tags: Intel, Atom, AMD