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CPU Sales Steam Ahead

The third quarter was a good one for chip makers, as worldwide sales grew 14.3 percent and worldwide PC microprocessor revenue rose 14.8 percent to $7.95 billion in the quarter, according to a new report by IDC. Mobile continues to be the most energetic of the market segments, and emerging nations are outpacing established markets, […]

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Andy Patrizio

Oct 28, 2007

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The third quarter was a good one for chip makers, as worldwide sales grew 14.3 percent and worldwide PC microprocessor revenue rose 14.8 percent to $7.95 billion in the quarter, according to a new report by IDC.

Mobile continues to be the most energetic of the market segments, and emerging nations are outpacing established markets, two trends that have been going on for some time.

Mobile processor shipments grew 26.6 percent in Q3 of 2007 over the same quarter last year. Intel had 80 percent of the market while AMD had 19 percent. In Q3 of ’06, it was 82-16, reflecting success for AMD in the mobile space, a relatively new market for the company.

“AMD’s gain in Turion [its mobile processor] was something,” said Shane Rau, program director for IDC’s Computing, Networking, and Storage Semiconductors business. “The fact that they have a product that can compete at all is a sign of maturity and success.”

IDC has moved up its projected crossover date for when it expects mobile computing sales to surpass desktops by about a year. Rau said the company expects that to occur at the end of 2009. IDC originally predicted it would happen at the end of 2010. This is due to the fact that the fast-growing emerging markets are adopting notebooks at a much higher rate than anticipated.

The desktop and server markets also grew, but nowhere near as fast. Desktop PC chips were up 7.7 percent over the 2006 quarter and servers were up 4.6 percent. However, the server segment also shows a major shift in fortunes. AMD had 24.6 percent of the market in Q3 2006 to Intel’s 75.2 percent.

Since then, Intel has released the Tigerton and Clovertown quad-core processors while AMD’s Quad Core Opteron, a.k.a. Barcelona, was six months late and shipped last month. The result has been erosion of AMD’s gains, which have now fallen to 13.8 percent of the market to Intel’s 86.1 percent.

Rau thinks AMD can begin to reverse things with Barcelona. “Barcelona will certainly stabilize the server processor business at AMD, but Intel is ramping on their latest quad core processors and really moving on all cylinders to keep the heat on AMD,” he said.

What will make or break Barcelona will be the results from independent testing houses. If Barcelona comes in as competitive with Intel’s quad core Xeons, then that will start to build positive customer perception and allow them to gain some market share back, said Rau.

Rau said the market has “exceeded our expectations two quarters in a row now,” and expects the fourth quarter to be good due to seasonality. The big question is the first quarter: “Will be it be a gradual drop off or will it go off a cliff,” he said. He is taking a wait-and-see approach to the release of Intel’s Penryn processors on November 12 and AMD’s Phenom processors, due by the end of the year.

This article was first published on InternetNews.com.

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Andy Patrizio

Andy Patrizio is a freelance journalist based in southern California who has covered the computer industry for 20 years and has built every x86 PC he’s ever owned, laptops not included.

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