Even though the worldwide x86 microprocessor market began to rebound in the second quarter of 2009 in terms of units, increased popularity of ultra low-cost microprocessors by Intel Corp. undermined ability of Advanced Micro Devices to sustain its market share, claims IDC. The market research firm warns that the demand for personal computers is still weak and the chip market recovered because of product refreshes.
PC Processor Market Increases 10.1% Sequentially
In Q2 2009, worldwide PC processor unit shipments rose 10.1% from the first quarter, compared to a decline of 10.9% from Q4 2008 to Q1 2009. Still, unit shipments declined 7.0% year over year.
Market revenue increased 7.9% from the first quarter of 2009, compared to a decrease of 11% from Q4 2008 to Q1 2009. Second quarter revenue declined 15.3% compared to the same quarter in 2008.
Intel's overall PC processor shipments increased 12.5% from Q1 2009 to Q2 2009, whereas AMD's overall PC processor shipments increased 1.8% in the same period.
While the increase is unusually positive for the second quarter of a year, IDC analysis of the results indicate that Intel and OEM inventory refreshes drove this performance and not the return of significant end demand for PCs.
Intel Posts Market Share Gain, Thanks to Atom, Refreshes
In Q2 2009, Intel earned 78.9% unit market share, a gain of 1.6%, while AMD earned 20.6%, a loss of 1.6%, and Via Technologies earned 0.5%, an increase of 0.1%.
Intel's shipments of Atom processors designed for netbooks increased 34% in Q2 2009 quarter-over-quarter. With such an increase in unit shipments, there is no surprise that Intel managed to gain market share globally, whereas AMD, which does not have a platform that would compete head-to-head against Atom, did not.
"The percentage of Intel's revenue earned in Asia/Pacific grew from 51% in Q1 2009 to 55% in Q2 2009. This fact, combined with the significant sequential 'snap-back' rise in Intel's overall processor shipments – particularly Atom shipments – while AMD's overall shipments were about flat, indicate that the PC processor market did not recover in Q2 2009. Instead, the market balanced out due to Intel driving Atom processors into ODMs who manufacture the systems, particularly in China and Taiwan,” noted Shane Rau, director of semiconductors: personal computing research at IDC.
This results indicate that netbook OEMs, having held off buying Atom processors in the first quarter and depleted their inventories, began refreshing those inventories in the second quarter. IDC estimates that the inexpensive Atom processors for netbook PCs represented 25% of Intel's mobile PC processor shipments in Q2 2009 and 8.1% of Intel's mobile PC processor revenues in the second quarter.
By form-factor, the rankings were as follows:
- In the desktop PC segment, Intel earned 70.2%, an increase of 0.2%, and AMD earned 29.4%, a sequential decrease of 0.5%. Via Technologies commanded 0.4% of desktop PC processor market.
- Intel commanded 86.9% unit share in the mobile PC processor segment, a gain of 2.6%, AMD finished with 12.6%, a loss of 2.4%, whereas Via earned 0.5%, down 0.2% from the prior quarter.
- In the PC server/workstation processor segment, Intel finished with 89.9% market share, a gain of 0.6% and AMD earned 10.1%, a loss of 0.6%.
PC Processor Market Still Weak
Having identified Intel and OEM's refreshing inventory as the major factors in the second quarter of and not the return of end demand, we cannot yet say that the PC processor market is recovering, it still is in weak condition, IDC claims.
"Going forward, IDC believes that ODMs and OEMs have balanced out their inventories and so we can't rely on inventory replenishment to drive market improvements. Instead, we can only rely on what actual end demand really is, and that means we have to be cautious not to be over-exuberant that, say, the traditional back-to-school PC buying season will materialize into a bullish second half. It won't,” added Mr. Rau.