The decline in PC chip shipments may be slowing but Netbook processor deliveries were off 33 percent, while Advanced Micro Devices gained on Intel, IDC said.
In the first calendar quarter of 2009, worldwide PC microprocessor shipments fell 10.9 percent from the fourth quarter of 2008, compared with a 17 percent decline from the third quarter to the fourth quarter, according to IDC.
AMD gained on Intel in the first quarter. Intel garnered a 77.3 percent unit market share, a loss of 4.7 percent, while AMD had a 22.3 percent share, a gain of 4.6 percent. AMD gained in the mobile and desktop PC markets, IDC said.
Overall, shipments were down, though the rate of decline may be slowing. "The PC processor market continued to reflect significant decline in end demand for most of 1Q09," said Shane Rau, director of Semiconductors: Personal Computing research at IDC. "However, some inventory replenishment by (PC makers) at the end of the quarter helped to slow the decline and bring the quarter in at a level only slightly worse than typical seasonal decline."
IDC noted that demand from PC suppliers picked up towards the end of the quarter but the market researcher cautioned that the demand was due to PC manufacturers "replenishing their inventories rather than reflecting a return of solid end demand and return to market normalcy."
Unit shipments dropped 13 percent from the first quarter of 2008 to the first quarter of 2009.
Intel's shipments of Atom processors for Netbooks plummeted 33 percent in the first quarter of 2009 compared to the fourth quarter, indicating that Netbook suppliers held significant inventory of Atom processors coming into the new year, according to IDC.
Market researchers IDC and Gartner made their cases on Wednesday for worsening chip sales in 2009, with both firms predicting that chip revenue will fall by more than 20 percent.
The worldwide semiconductor market will not recover until 2010, primarily due to a very weak fourth quarter, according to IDC. The market researcher expects a decline in global chip sales of 22 percent in 2009, due, among other things, to low chip factory utilization rates and price erosion.
Memory revenue (DRAM and NAND flash) should stabilize by the second half of 2009, but revenue growth will not return until 2010, IDC said. Capital spending is expected to fall by more than 45 percent in 2009.
There is some light at the end of the tunnel, however. "The semiconductor market will begin to stabilize at the end of 2009 and improve in 2010 with a positive growth rate. However, the market will not rise to the levels seen in 2007 and 2008, until beyond 2011," IDC said.
Gartner, on the other hand, doesn't see a recovery to 2008 levels until 2013 and forecasts an even steeper revenue decline, of 24 percent, to $194.5 billion in 2009. This revises downward Gartner's December forecast of a 16 percent drop in the 2009 chip market.
Worldwide PC processor shipments fell sharply in the fourth quarter of 2008, though Intel's Atom chip bucked the trend, according to new data from IDC.
In the fourth quarter, processor unit shipments declined 17 percent quarter over quarter and 11.4 percent year over year, while market revenue declined 18 percent over the previous quarter and 22.2 percent compared to the year-earlier period to $6.78 billion, IDC said.
"The decline in PC processor unit shipments in the fourth quarter was the worst sequential decline since IDC started tracking processor shipments in 1996," said Shane Rau, a chip analyst at IDC.
(Credit:
IDC)
For the full year, total PC processor unit shipments grew 10 percent, while revenue grew 0.9 percent to $30.8 billion.
Intel's Atom processor is proving to be recession-proof. The popular Netbook chip prevented overall unit decline percentages from going above 20 percent. Without Atom, worldwide PC processor unit shipments would have been significantly worse: declining 21.7 percent quarter over quarter and 21.6 percent year over year, IDC said.
Intel grabbed an 81.9 percent unit market share in the fourth quarter, up 1.1 percentage points over the previous quarter. AMD fell to 17.7 percent, a loss of less than 1 percentage point. For the full year, Intel had an 80.3 percent unit market share, a gain of nearly 3 percentage points, while AMD's share dropped to 19.2 percent, a loss of 3.1 percentage points.
In 2008, Intel gained 4.8 percentage points in mobile PC processor market share, garnering 87.1 percent of the market. AMD finished with a 12.1 percent share of the mobile PC processor market, a loss of 5.3 percentage points.
Looking ahead, IDC said demand remains so weak that it expects sequential processor unit shipment to decline in both the first and second quarters of 2009.
Intel's Atom processor lifted processor shipments in the third quarter but the future for overall processor shipments is uncertain, IDC said.
Intel's Atom processor lifted shipments in the third quarter, IDC said.
Worldwide PC microprocessor shipments in the third calendar quarter of 2008 reached record levels again, according to market researcher IDC. However, the outlook for the processor market in the fourth quarter and 2009 is "very murky," said Shane Rau, director of Semiconductors: Personal Computing research at IDC, in a statement.
Worldwide PC processor unit shipments grew 14 percent quarter over quarter and 15.8 percent year over year, while market revenue grew 7.6 percent from the previous quarter and 4.1 percent compared to a year ago to $8.3 billion.
Intel's new Atom processor for the Netbook market "made a notable difference in the overall market performance," Rau said. Without Atom, unit shipments grew 8.3 percent from the second quarter and 8.7 percent from the same quarter last year.
"Not considering the effects of Atom, the overall market still grew at a decent pace in the third quarter," Rau said. "Intel's and AMD's shipments grew at a rate only slightly slower than typical for a third quarter, and seasonal demand appeared reasonable up until September."
"Up until September" may be the operative phrase, however, as that's when the U.S. financial markets fell sharply. "The worldwide demand environment looks weak, and both Intel and Advanced Micro Devices indicated an uncertain outlook for the market. As a result, IDC is conservative about 2009 and will be lowering its upcoming unit forecast for the year, the report said.
By segment, while the mobile processor segment grew aggressively, the server segment was soft, Rau said.
Third-quarter vendor highlights based on units shipped:
Intel claimed an 80.8 percent market share, a gain of 1.1 percent.
AMD finished with 18.5 percent, a loss of 1.2 percent.
Via Technologies earned a 0.6 percent share.
Being fabless isn't so hip these days.
Rambus and MIPS Technologies are both chip companies that don't have their own chip fabrication facilities. Intel does. Perhaps not coincidentally, Rambus and MIPS are restructuring, while Intel's business is coasting on top of surging processor shipments.
Both Rambus and MIPS, which make a living off licensing intellectual property for chips, announced layoffs this week. Intel, meanwhile, is selling lots of its tiny Atom processors and seeing processor shipments surge overall.
Rambus said Thursday that it will reduce its workforce by approximately 90 positions and will take a restructuring charge of approximately $4 million in the next two quarters. Earlier in the week, MIPS announced a restructuring charge it estimates at between $4 million and $5.5 million, and layoffs of its own: 15 percent of its 512 employees. "We believe the market continues to show signs of softness," MIPS said in a statement.
Don't tell that to Intel. IDC released a report this week showing that Intel processor shipments were up 20.8 percent in the second quarter over the same period last year. Intel market share also crept up by 0.9 percent in the second quarter, bringing it to 79.7 percent, according to IDC.
And sales of Intel's Atom processors are exceeding expectations, according to Reuters. The report quotes Chief Financial Officer Stacy Smith, who said that "Atom is off to a very, very rapid start, far exceeding our expectations when we started the year."
The Atom processor is used in high-profile products such as the Asus Eee PC and Acer Aspire.
Barring major strategic blunders, Intel appears to be on course to make gains in other markets. The company will preview its next-generation "Nehalem" Core i7 chip architecture at the Intel Developer Forum next week. Core i7 processors are due to ship in the fourth quarter.
And Intel is ramping up production of its latest generation of 45-nanometer mobile processors now. New ultra-low-power chips (rumored to appear in the next-generation MacBook Air, among other ultraslim notebooks) are due in September. Also, the chipmaker's first quad-core mobile processor debuted this week in laptops from Lenovo and Hewlett-Packard.
Dell will sell you a 128GB solid state drive for an unprecedented $649. But wait. An IDC report claims the performance gap between solid state drives and lower-cost high-performance hard disk drives is not that significant at the system level.
Solid state drive offered by Dell
(Credit: Dell Computer)Solid state drives are attracting more scrutiny as they increase in capacity and decrease in price. (Dell's $649 drive is a radical price drop since many drives with half the capacity still sell for more than $700.)
Solid state drives (SSDs) are considered to be generally more power efficient, faster, and in some respects more reliable than hard disk drives.
IDC tested 2.5-inch 7200 rpm desktop drives against SSDs and found that previous tests comparing SSDs and hard disk drives may be misleading, according to SearchStorage.com, which cited the IDC report.
"Many tests have been done comparing 4200 rpm hard drives to SSDs," said IDC analyst David Reinsel. "But 5400 rpm is now mainstream and even 7200 rpm disks are available." The IDC report says the performance gap between computers with 7200 rpm 2.5-inch drives and those with SSDs was smaller than expected because the performance of the entire system must be taken into account.
(It should be noted that 4200 rpm hard disk drives are sometimes used in comparative testing because 4200 rpm drives are offered along with SSDs in laptops such as the MacBook Air and Hewlett-Packard 2510p.)
IDC's Reinsel also said that system redesigns will be necessary in both PCs and enterprise storage systems to reap the full benefits of SSDs. One of the challenges is that SSDs generally write data more slowly than they read data.
In related news, The Tech Report also did benchmarking of SSDs and 2.5-inch hard disk drives rated at 5400 and 7200 rpm. Generally, the SSDs were faster (in some cases much faster) but not in every benchmark and not by that much in some benchmarks.
SSDs have received a lot more attention since companies like Apple, Hewlett-Packard, and Toshiba have adopted them as alternatives to hard disk drives in laptops. Lesser known is that SSDs are also being deployed by large corporations in server-related applications. Companies like Citibank and American Express peg server performance on IOPS or input/output operations per second where SSDs beat hard disk drives handily.
The IDC report follows other reviews that claim solid state drives (SSDs) are not as power efficient as manufacturers claim--though the power-efficiency testing methodology used by some review sites has been disputed by manufacturers.
IDC abstract here.
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