CPU market warned of possible decline

The PC processor market could be about to tail off despite peaking in the third quarter

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By  Andrew Seymour Published  November 12, 2008

The PC processor market could be about to tail off despite peaking in the third quarter on the back of a ramp-up in the assembly of ultra-mobile devices.

Research house IDC admits its outlook for the global chip market during the fourth quarter and 2009 is ‘murky’. It is set to lower its upcoming unit forecast for the year after conceding that the demand environment looks weak. Chip makers Intel and AMD have also indicated uncertainty over their expectations of the market.

The prospect of a decline in fortunes will be of major concern to the Middle East channel, where trading in computer chips accounts for a significant portion of the market — especially as it follows a recent spike in global CPU consumption.

Year-on-year sales increased 16% in unit shipments and 4% in dollar value to US$8.3 billion in Q3. Intel’s new Atom processor for low-cost PCs — or netbooks — made a notable difference to the growth. Without it, the market would have expanded just 8%.

"Not considering the effects of Atom, the overall market still grew at a decent pace in the third quarter," stated Shane Rau, director of semi-conductors for PC research at IDC. “Intel's and AMD's shipments grew at a rate only slightly slower than typical for a third quarter, and seasonal demand appeared reasonable up until September. By segment, while the mobile processor segment grew aggressively, the server segment was soft."

On a vendor basis, Intel continued to reign supreme with 81% of the overall market during the third quarter. AMD’s market share slipped one percentage point to 18.5%, while VIA Technologies scooped up the remaining 0.6%.

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