Intel gains market share in a difficult CPU market
Business and Law Features

Intel gains market share in a difficult CPU market

Chicago (IL) – Worldwide PC processor shipments accelerated their decline in the fourth quarter of 2008, IDC said. The downturn is estimated to continue throughout the first half of this year and is apparently also impacting the balance of processor shipments: Intel is posting gains, while AMD has trouble maintaining its share.

IDC’s market estimate isn’t especially encouraging, as the firm stated that the sequential PC processor unit shipment decline in Q4 2008 was the worst since it began monitoring the segment back in 1996. Shipments dropped by 17.0% sequentially and 11.4% year over year. Revenues were down 18.0% to $6.78 billion sequentially and 22.2% year over year.

However, the first half of 2008 was good enough for the industry to post overall growth. Shipments for the year were up 10.0% while revenue grew 0.9% to $30.8 billion.

It is worth noting that a significant portion of the gain in fact can be contributed to Intel’s Atom processor, which has become the dominant processor in the quickly growing netbook segment. While the average selling price (ASP) and relatively high volume negatively impacted Intel’s overall processor ASP, it enabled the company to open an entirely new market segment that already has a demand for more than 10 million processors per year. Without Atom, worldwide PC processor unit shipments declined by 21.7% sequentially and by 21.6% year over year, Intel said.

Overall, Intel seems to be much better prepared for the current downturn and the trend towards netbooks than any other competitor. IDC said that Intel now stands at a market share of 81.9%, up 1.1 points sequentially, while AMD was down 0.9 points to 17.7%. The remaining 0.4% went to Via. For the entire year, Intel posted a 80.3% share (+2.9 points) and AMD 19.2% (-3.1 Points). The dominance of Intel is even more apparent in the mobile segment.

In mobile CPUs, Intel has hit a new high of 89.1% (+1.7 points) in Q4 2008 and AMD declined by 1.2 points to 10.2%. Via crossed the finish line with 0.7%. In the PC server/workstation processor segment, Intel came in with a 88.1% market share, a gain of 2.5 points and AMD at 11.9% (–2.5 points) In the desktop PC processor segment, Intel posted a 73.9% share (+0.4 points), and AMD earned 26.0% (–0.4 points), according to IDC.

IDC expects sequential processor unit shipment to decline in both Q1 and Q2 2009.