Processor Shipments Up 39%

Chip revenue was also up 40% in the first quarter, indicating that PC makers are seeing the fruits of an improving economy.
Microprocessor sales in the first quarter indicate that PC makers are preparing for a market recovery brought on by an improving economy, a market researcher says.

As is typical for the first quarter of any year, sales and shipments were down compared to the previous quarter, which gets a big boost from the holiday shopping season. But the decline of 5.6% in shipments in the first quarter of 2010 was less than the typical drop of around 7% to 8%, IDC said. Revenue quarter-to-quarter fell 2%.

Year-to-year comparisons showed a big jump in sales. Shipments in the quarter rose 39% from the same period a year ago, while revenue soared by 40.4%, IDC said. Contributing to the high numbers was the fact that the first quarter of 2009 marked the height of the worst economic recession since the Great Depression.

"A decline of 5.6% is modest and wouldn't mean much by itself," IDC analyst Shane Rau said in a statement. "However, after the huge rise in shipments we saw in the fourth quarter, it adds more credibility to market recovery and that the PC industry anticipates improvement in PC end-demand in 2010."

Good news for chip and PC makers was the 4.1% increase in average selling price in the quarter compared to the fourth quarter of 2009. The rise was due to an increase in sales of higher-end PCs. Notably, Intel's Atom processor, used primarily in inexpensive mini-laptops called netbooks, comprised only 20% of the chipmakers' mobile processor mix in the quarter, compared to 24% in the previous quarter.

"Intel's new Core processors and AMD's new Athlon processors are ramping, and at a time when, IDC believes, consumers and corporations will be anticipating a much healthier 2010 and looking for more value than just low price in their PCs," Rau said.

As to the major vendors, Intel ended the quarter with an 81% market share, a gain of half of a percent, while Advanced Micro Devices earned 18.8%, a loss of six-tenths of a percent. No. 3 VIA earned a share of two-tenths of a percent.

IDC has predicted a 15.1% increase in PC processor shipments year-over-year in 2010. However, low inventories and strong outlooks from PC semiconductor vendors and some PC makers, as well as stronger confidence in the economy by consumers and businesses, could push that number higher, IDC said.