Global PC microprocessor market rebounds in 2Q09, but IDC recommends caution for 3Q09

SAN MATEO, USA: Worldwide PC microprocessor shipments in the second calendar quarter of 2009 (2Q09) rose notably, according to new data from IDC.

While the increase is unusually positive for the second quarter of a year, IDC analysis of the results indicate that Intel and OEM inventory refreshes drove this performance and not the return of significant end demand for PCs.

In 2Q09, worldwide PC processor unit shipments rose 10.1 percent from 1Q09 to 2Q09, compared to –10.9 percent from 4Q08 to 1Q09. Unit shipments declined 7 percent year over year.

Market revenue increased 7.9 percent from 1Q09 to 2Q09, compared to –11 percent from 4Q08 to 1Q09. Second quarter revenue declined 15.3 percent compared to the same quarter in 2008.

Intel's overall PC processor shipments increased 12.5 percent from 1Q09 to 2Q09. AMD's overall PC processor shipments increased 1.8 percent in the same period.

Intel's shipments of Atom processors designed for mini-notebook PCs (which Intel calls "Netbooks") increased 34 percent in 2Q09 compared to 1Q09. This results indicates that mini-notebook OEMs, having held off buying Atom processors in 1Q09 and depleted their inventories, began refreshing those inventories in 2Q09.

IDC estimates that the inexpensive Atom processors for mini-notebook PCs represented 25 percent of Intel's mobile PC processor shipments in 2Q09 and 8.1 percent of Intel's mobile PC processor revenues in 2Q09.

"The percentage of Intel's revenue earned in Asia/Pacific grew from 51 percent in 1Q09 to 55 percent in 2Q09," noted Shane Rau, director of Semiconductors: Personal Computing research at IDC.

"This fact, combined with the significant sequential 'snap-back' rise in Intel's overall processor shipments—particularly Atom shipments—while AMD's overall shipments were about flat, indicate that the PC processor market didn't recover in 2Q09. Instead, the market balanced out due to Intel driving Atom processors into ODMs who manufacture the systems, particularly in China and Taiwan."

2Q09 vendor highlights
In 2Q09, Intel earned 78.9 percent unit market share, a gain of 1.6 percent, while AMD earned 20.6% percent, a loss of 1.6 percent, and VIA Technologies earned 0.5 percent.

In 2Q09 by form factor, Intel earned 86.9 percent share in the mobile PC processor segment, a gain of 2.6 percent, AMD finished with 12.6 percent, a loss of 2.4 percent, and VIA earned 0.5 percent.

In the PC server/workstation processor segment, Intel finished with 89.9 percent market share, a gain of 0.5 percent and AMD earned 10.1 percent, a loss of 0.5 percent. In the desktop PC processor segment, Intel earned 70.2 percent and AMD earned 29.4 percent; share changes were negligible.

Market outlook
Having identified Intel and OEMs refreshing inventory as the major factors in 2Q09 and not the return of end demand, we cannot yet say that the PC processor market is recovering, it still is in weak condition.

"Going forward," added Rau, "IDC believes that ODMs and OEMs have balanced out their inventories and so we can't rely on inventory replenishment to drive market improvements. Instead, we can only rely on what actual end demand really is, and that means we have to be cautious not to be over-exuberant that, say, the traditional back-to-school PC buying season will materialize into a bullish second half. It won't."

IDC's forthcoming report, Worldwide PC Processor 2Q09 Vendor Shares, will provide worldwide market share results for PC processor vendors on an overall unit and revenue basis, as well as by form factor (desktop, mobile, and PC server).