Tech Rebound: Chip Sales Up Sharply in Q3

Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More .

Worldwide PC microprocessor shipments jumped 23 percent during third calendar — rising to all-time record levels, according to new data from industry researcher IDC.

That might not be surprising to anyone watching the better-than-expected quarterly earnings by some of the space’s key players, like Intel, AMD and nVidia.

IDC findings show that PC processor unit shipments rose 23 percent compared to the previous quarter, a growth rate that is approximately double the normal growth in unit shipments for the same period.

However, due to price pressures, industry revenue grew just 14 percent quarter-over-quarter to $7.4 billion.

Overall, mobile chip sales led the market, thanks to the strength in notebooks and especially netbooks. Mobile processor sales rose 35.7 percent in 3Q09 compared to second quarter.

According to IDC, netbook-friendly Atom processors dominated, reaching record unit shipments. But their low average selling price led to an overall price erosion of 7 percent.

Desktop PC processors saw 11.4 percent growth quarter-over-quarter while x86 server processors grew 12.2 percent.

Total unit sales exceeded 88 million units — just ahead of the same period a year ago, when sales were just below 88 million. As a result, not only have chip sales recovered, they are actually ahead of levels before the economy collapsed.

“Just the fact the numbers are about equal to 2008 indicates the PC processor market has recovered,” IDC analyst Shane Rau said.

Intel widens its lead

The increase saw Intel (NASDAQ: INTC) expand its lead over its rivals, with the No. 1 chipmaker now holding 81.1 percent share of the worldwide PC processor market’s unit shipments, a share gain of 2.2 percentage points.

According to IDC, AMD (NYSE: AMD) now accounts for 18.7 percent of the market, a loss of 2 percentage points. VIA Technologies has just 0.2 percent, down from the 0.6 percent share it had in Q3 2008

Intel is strongest in servers, with 90.4 percent share compared to AMD’s 9.6 percent share, suggesting that Intel’s Nehalem is seeing major success against AMD’s six-core Opterons. In Q3 2008, Intel had 85.6 percent share and AMD held 14.4 percent share.

However, AMD is strongest in desktops, with 27.4 percent of the market in Q3 2009, according to IDC. That’s up from the 26.4 percent it held in the third quarter of 2008. Meanwhile, Intel’s share declined slightly from 73.5 percent to 72.2 percent.

In mobile, Intel made up 88 percent of the market while AMD had 11.9 percent. Both were up very slightly, less than one percentage point. Their gains came at the expense of VIA, which fell from 1.2 percent in Q3 2008 to 0.2 percent in 2009, IDC said.

Due to the market’s excellent performance in Q3 and continued strong indicators for fourth quarter, IDC has raised its forecast for PC processor unit shipments in 2009 to well over 300 million units — along with a unit growth rate of 1.5 percent compared to 2008.

That’s a remarkable turnaround, given that in August, Rau was still projecting the chip market would not surpass 2008 levels until 2012.

But Rau added that the CPU market is only a part of the overall semiconductor market, for which he is still expecting a 2012 recovery.

However, it will get better this year. Last March, IDC predicted a 22 percent decline in the semiconductor market in 2009. Now it’s expecting that to figure to still remain in the double digits, but considerably less than 22 percent.

For semiconductors, the second half of 2010 will be when things get kicked off. “It’s going to be driven by consumers but also corporations coming off the sidelines,” Rau told InternetNews.com. “Corporations … have to decide to spend regardless of operating system and they aren’t going to open up spending budgets until Q2.”

He is referring to Windows 7, which came charging out of the gate in late October. Despite some early signs of an impact on hardware sales, Rau doesn’t believe it will be a big player in PC sales in the end.

“I challenge the market to sustain those numbers,” he said. “It’s deliberate that Microsoft launched in late October to time with the holiday buying season. I think part of the [chip sales] bump is not only due to Windows 7 but also normal seasonal patterns.

“When we look back on these numbers we’re going to find Windows 7 wasn’t a terribly strong driver.”

Article courtesy of InternetNews.com.