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Worldwide PC Microprocessor Market Rebounds in 2Q09

Intel drove an unusual sequential rise in PC processor unit shipments in 2Q09, but IDC recommends caution about 3Q’09

Worldwide PC microprocessor shipments in the second calendar quarter of 2009 (2Q09) rose notably, according to new data from IDC. 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.

In 2Q09, worldwide PC processor unit shipments rose 10.1% from 1Q09 to 2Q09, compared to -10.9% from 4Q08 to 1Q09. Unit shipments declined 7.0% year over year. Market revenue increased 7.9% from 1Q09 to 2Q09, compared to -11% from 4Q08 to 1Q09. Second quarter revenue declined 15.3% compared to the same quarter in 2008. Intel’s overall PC processor shipments increased 12.5% from 1Q09 to 2Q09. AMD’s overall PC processor shipments increased 1.8% in the same period.

Intel’s shipments of Atom processors designed for mini-notebook PCs (which Intel calls “Netbooks”) increased 34% in 2Q09 compared to 1Q09. This results indicates that mini-notebook OEMs, having held off buying Atom processors in 1Q09 and depleted their inventories, began refreshing those inventories in 2Q09. IDC estimates that the inexpensive Atom processors for mini-notebook PCs represented 25% of Intel’s mobile PC processor shipments in 2Q09 and 8.1% of Intel’s mobile PC processor revenues in 2Q09.

“The percentage of Intel’s revenue earned in Asia/Pacific grew from 51% in 1Q09 to 55% in 2Q09,” noted Shane Rau, director of Semiconductors: Personal Computing research at IDC. “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 didn’t recover in 2Q09. Instead, the market balanced out due to Intel driving Atom processors into ODMs who manufacture the systems, particularly in China and Taiwan.”

2Q09 Vendor Highlights

  • In 2Q09, 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%.
  • In 2Q09 by form factor, Intel earned 86.9% share in the mobile PC processor segment, a gain of 2.6%, AMD finished with 12.6%, a loss of 2.4%, and VIA earned 0.5%. In the PC server/workstation processor segment, Intel finished with 89.9% market share, a gain of 0.5% and AMD earned 10.1%, a loss of 0.5%. In the desktop PC processor segment, Intel earned 70.2% and AMD earned 29.4%; share changes were negligible.

Market Outlook
Having identified Intel and OEM’s refreshing inventory as the major factors in 2Q09 and not the return of end demand, we cannot yet say that the PC processor market is recovering, it still is in weak condition.

“Going forward,” added Rau, “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.”

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IDC’s forthcoming report, Worldwide PC Processor 2Q09 Vendor Shares, will provide worldwide market share results for PC processor vendors on an overall unit and revenue basis, as well as by form factor (desktop, mobile, and PC server).

About IDC
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 90 countries worldwide. For more than 45 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company.

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