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IDC on Wednesday released its findings concerning central processing units market in Q4 2008 and once again confirmed that the PC market in general is facing steep drop in demand. The analysts from the market tracking firm believe that declines will continue in Q1 2009 and Q2 2009, which will hurt both PC makers as well as CPU vendors, such as Advanced Micro Devices and Intel Corp.


The Worst Sequential Decline in CPU Sales Since 1996

“The decline in PC processor unit shipments in the fourth quarter was the worst sequential decline since IDC started tracking processor shipments in 1996. After hinting at a decline last September, the market fell of a cliff in October and November,” said Shane Rau, director of semiconductors at personal computing research at IDC.

In Q4 2008, worldwide PC processor unit shipments declined by17.0% quarter over quarter (QoQ) and by 11.4% year over year (YoY), according to IDC; market revenue declined by 18.0% QoQ and by 22.2% YoY to $6.78 billion. For the full year 2008, total PC processor unit shipments grew 10%, while revenue grew only 0.9% to $30.8 billion.

Intel's Atom processor for netbooks and other ultra low cost personal computers continued to make a notable difference in the overall market performance but not enough to help the market avoid dramatic decline. Without Atom, worldwide PC processor unit shipments declined 21.7% sequentially and 21.6% annually.

Intel Gains Share Amid Market Decline

In Q4 2008, Intel earned 81.9% unit market share, a gain of 1.1%, while AMD controlled 17.7% of shipments, a loss of 0.9%. Via Technologies supplied 0.4% of x86 microprocessors globally.

In the desktop PC processor segment, Intel had market share of 73.9%, a gain of 0.4%, and AMD dropped 0.4% to 26.0%, still not a bad result for the company.

Intel commanded the lion’s share of microprocessors for notebooks – 89.1%, a gain of 1.7% – in the fourth quarter of 2008, whereas AMD finished with 10.2%, a loss of 1.2%, and Via earned 0.7%.

In the PC server/workstation processor segment, Intel finished with 88.1% market share, a gain of 2.5% and AMD shipped 11.9% of processors designed for servers, a decline of 2.5%.

For the full year, Intel shipped 80.3% of microprocessors in terms of units and boosted its market share by 2.9% compared to 2007. By contrast, AMD’s market share decreased by 3.1% and was equal to 19.2%. Via Technologies earned 0.4% of the market, according to IDC.

AMD managed to avoid any tangible market share loss in the desktop space: IDC data shows Intel with 73.4% of the market and AMD with 26.4% of the market, which is very similar to the results in 2007.

Unfortunately for the world’s second largest chip supplier, the lack of competitor for Atom processor and inability to promote the new code-named Puma notebook platform in time amid generally weak mobile product mix played its negative role: Intel’s share increased 4.8% of the market to 87.1%, whereas AMD’s unit share declined unprecedented 5.3% to 12.1%. Meanwhile, thanks to increased popularity of ultra low-cost personal computers Via Technologies succeeded in increasing its market share to 0.8%, a gain of 0.5%.

In the PC server/workstation processor segment, Intel finished with 86.6% market share, a gain of 0.9% and AMD earned 13.4%, a loss of 0.9%.

Market Outlook: Weak

The decline of the PC processor market in Q4 2008 was due to a precipitous drop in end system demand that quickly moved up the PC supply chain through OEMs and contract manufacturers to the processor vendors. While the fast reaction of the supply chain will help avoid significant inventories, demand remains so weak that IDC expects sequential processor unit shipment to decline in both Q1 2009 and Q2 2009.

Tags: AMD, , Intel

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