The global market of central processing units (CPUs) grew significantly both in terms of units and in terms of revenues. Microprocessors for mobile applications led in terms of growth, but shipments of chips for desktops, servers and workstations also increased. Intel Corp. managed to boost its market shares across the board, whereas Advanced Micro Devices and Via Technologies have lost share.
PC Processor Market Up 23% Sequentially
Worldwide PC microprocessor shipments in the third calendar quarter of 2009 rose substantially and, in fact, to all-time record levels for a single quarter, according to new data from IDC. The data indicates that PC processor unit shipments in Q3 2009 rose 23% compared to Q2 2009, growth that is approximately double the normal growth in unit shipments for the same period. Moreover, unit shipments of processors actually exceeded those in Q3 2009.
“Most meaningful about Q3 2009 is that, since PC processor shipments overall just slightly exceeded shipments in Q3 2008 – which was itself a record quarter at the time – we know that the processor market is recovering,” said Shane Rau, director of semiconductors: personal computing research at IDC.
Intel Atom Decreases Average Selling Prices of CPUs
In terms of revenue, the PC processor market grew more than 14% quarter-over-quarter to $7.4 billion. Unfortunately, $7.4 billion means that the market was down 10.85% annually (by almost a billion of dollars, which clearly indicates that end-users and businesses are still reluctant to invest into expensive technologies. Another major reason of the price-erosion is that inexpensive Intel Atom processors have gained unit market share during the quarter.
Looking at market performance by PC form-factor, mobile PC processors continue to drive growth. Mobile PC processors, which include Intel's Atom processors designed for netbooks, increased 35.7% in Q3 2009 compared to Q2 2009. Desktop PC processors grew 11.4% quarter over quarter and x86 server processors grew 12.2% quarter over quarter.
“While Atom processors led the PC processor market to reach record unit shipments, on the revenue side, their low average selling price led to notable price erosion, more than 7%. As a result, while market shipments rose 23% compared to Q2 2009, market revenue grew less, 14.1% compared to Q2 2009,” explained Mr. Rau.
AMD Loses Market Share to Intel
In Q3 2009, Intel earned 81.1% share of the worldwide PC processor market's unit shipments, a share gain of 2.2%, while AMD commanded 18.7%, a loss of 2.0%, and Via Technologies had share of 0.2%.
By form-factor, the rankings were as follows:
- In the desktop PC segment, Intel earned 72.2%, an increase of 2.0%, and AMD earned 27.4%, a sequential decrease of 2%. Via Technologies commanded 0.3% of desktop PC processor market.
- Intel controlled 88% unit share in the mobile PC processor segment, a gain of 1.1%, AMD finished with 11.9%, a loss of 0.7%, whereas Via earned 0.2%, down 0.3% from the prior quarter.
- In the PC server/workstation processor segment, Intel finished with 90.4% market share, a gain of 0.5% and AMD’s share declined by 0.5% to 9.6%.
Considering the fact that Intel managed to boost its unit market share across the board, not only in the mobile segment, AMD and Via Technologies should reconsider their market tactics going forward. In particular, AMD needs to further speed-up introduction of newer multi-core 45nm chips aimed at mainstream desktops. The firm already unveiled many new chips in Q4 2009 and it will have to remain pretty aggressive going forward so that not to lose further unit share.
CPU Market Recovers, But Outlook Remains Conservative
Due to the market's excellent performance and signs early in the fourth quarter that demand for PCs, particularly mobile PCs is healthy, IDC has raised its forecast for PC processor unit shipments in 2009 to well over 300 million units and a unit growth rate of 1.5% compared to 2008.
"Compared to where the market was at the beginning of 2009, PC processors have come back remarkably strong," claimed Mr. Rau.
Despite raising its forecast for 2009, IDC is conservative about early 2010.
“While it's clear our concerns about the second half of the year weren't necessary, we're still watching for a 'gotcha', possibly in Q1 2010. The market's growth has been due to shipments of inexpensive Atom processors being sold into markets like China, which is being stimulated by government incentives there. The Chinese market can be very opaque – there are lots of places where inventories can hide. We have to be on the lookout for when China decides it can’t consume more processors. Meanwhile, the U.S. market is still hamstrung by housing foreclosures and rising job losses,” said the analyst.