Sequential PC processor unit shipment decline in 4Q08 was the worst since IDC started tracking

SAN MATEO, Calif., February 11, 2009 – Worldwide PC microprocessor shipments fell significantly in the fourth calendar quarter of 2008 (4Q08 ), according to new data from IDC. Further demand decline in 1Q09 points to a very poor outlook for the first half of this year.

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 $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.

Intel's Atom processor for mini-notebook PCs (which Intel calls ''Netbooks'') continued to make a notable difference in the overall market performance but not enough to help the market avoid 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.''

4Q08 and 2008 Vendor Highlights

In 4Q08, Intel earned 81.9% unit market share, a gain of 1.1%, while AMD earned 17.7%, a loss of –0.9%, and VIA Technologies earned 0.4%. In the full year 2008, Intel earned 80.3% unit market share, a gain of 2.9%, AMD earned 19.2%, a loss of –3.1%, and VIA Technologies earned 0.4%.

In 4Q08 by form factor, Intel earned 89.1% share in the mobile PC processor segment, a gain of 1.7%, AMD finished with 10.2%, a loss of -1.2%, and VIA earned 0.7%. In the PC server/workstation processor segment, Intel finished with 88.1% market share, a gain of 2.5% and AMD earned 11.9%, a loss of –2.5%. In the desktop PC processor segment, Intel earned 73.9%, a gain of 0.4%, and AMD earned 26.0%, a loss of –0.4%.

In 2008 by form factor, Intel earned 87.1% share in the mobile PC processor segment, a gain of 4.8%, AMD finished with 12.1%, a loss of –5.3%, and VIA earned 0.8%, a gain of 0.5%. In the PC server/workstation processor segment, Intel finished with 86.6% market share, a gain of 0.9% and AMD earned 13.4%, a loss of –0.9%. In the desktop PC processor segment, Intel and AMD earned 73.4% and 26.4% share respectively; share changes were negligible.

Market Outlook

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, demand remains so weak that IDC expects sequential processor unit shipment to decline in both 1Q09 and 2Q09.

IDC's forthcoming report, Worldwide PC Processor 4Q08 Vendor Shares (Doc #216748), 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).

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