PC processor market to continue free fall in 2009

Stan Beer
Thursday, 12 February 2009 06:09

IT Industry - Market

The global PC microprocessor market was devastated in the last quarter of 2008 and looks set to continue its precipitous drop in 2009, according to a new report. What has been described as the worst decline on record could have been even worse if it had not been for the emergence of the netbooks.

According to the latest figures from market analyst group IDC, the sequential PC processor unit shipment decline in the fourth calendar quarter of 2008 (4Q08) was the worst since IDC started tracking. Further demand decline in 1Q09 points to a very poor outlook for the first half of this year, IDC states.

In 4Q08, worldwide PC processor unit shipments declined –17.0% quarter over quarter (QoQ) and –11.4% year over year (YoY); market revenue declined –18.0% QoQ and –22.2% YoY to US$6.78 billion. For the full year 2008, total PC processor unit shipments grew 10.0%, while revenue grew 0.9% to $30.8 billion.

According to IDC, Intel's Atom processor for mini-notebook (netbook) PCs continued to make a notable difference in the overall market performance but not enough to help the market avoid a dramatic decline. Without Atom, worldwide PC processor unit shipments declined –21.7% QoQ and –21.6% YoY.

''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, director of Semiconductors: Personal Computing research at IDC.

"After hinting at a decline last September, the market fell of a cliff in October and November.''

IDC says the decline of the PC processor market in 4Q08 was due to a precipitous drop in end system demand that quickly moved up the PC supply chain through OEMs and contract manufacturers to the processor vendors. While the fast reaction of the supply chain will help avoid significant inventories, according to IDC, demand remains so weak that IDC expects sequential processor unit shipment to decline in both 1Q09 and 2Q09.

CONTINUED Page 2