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    Despite Intel’s Atom Processor Strength, Overall Chip Market Declines

    By
    Nicholas Kolakowski
    -
    January 30, 2009
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      On the heels of this week’s news indicating that computer graphics chip shipments had been bludgeoned by the recession, a new Mercury Research report suggests that the overall x86 processor market, which includes notebook, desktop and server CPU shipments, has been similarly affected, declining 18 percent between the third and fourth quarter of 2008.

      The Jan. 30 Mercury Research report found that the overall x86 market was down 8.8 percent compared to the fourth quarter of 2007.

      This affected chip shipments from market leaders Intel and Advanced Micro Devices and Via, which makes low-watt, low-cost notebook processors. This follows an unusually strong third quarter in which the x86 processor market grew 13 percent compared to the same period in 2007, roughly 3 percent above the average.

      Nor are conditions likely to improve in the near future.

      “Leading indicators are that the first quarter will be much worse than the seasonal average decline of 7.4 percent, with our forecast currently at 15 [percent] for the first quarter based on market conditions in mid-January,” Dean McCarron, an analyst with Mercury, wrote in an e-mail. “Clearly the processor market has been impacted by the worldwide recession and financial crisis.”

      Market share for AMD and Via remained stable, declining by 0.7 and 0.2 percent, respectively, from the previous quarter. However, Intel underwent a slight increase in its share, from 81.2 to 82.1 percent.

      “Without the presence of Atom and strong netbook sales in Intel’s business, the market share results would have appeared largely unchanged,” McCarron wrote.

      For 2008 as a whole, Intel claimed an 80.4 percent share of the x86 processor market up from 77.1 percent in 2007. AMD’s share declined from 22.1 percent to 18.5, and Via’s rose from 0.8 to 1.1 percent. The total x86 processor market expanded 13.3 percent over 2007.

      Desktop and notebook CPU shipments suffered an 18 percent drop in growth, even as server CPU shipments declined 25 percent. The report attributed the latter to businesses cutting back on infrastructure spending, and enterprises having finished their most recent server refresh cycle.

      Avatar
      Nicholas Kolakowski
      Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.

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