Global PC Chip Shipments Set Record

Global shipments of PC microprocessors set a record in the fourth quarter last year, while stable average selling prices drove overall revenue up, a market research firm said Tuesday. The market share for the two major vendors, Intel and Advanced Micro Devices, didn't change significantly in the quarter.

Shipments grew 8.5% sequentially in the fourth quarter to reach a record level for the second quarter in a row, IDC said. Growth in shipments coupled with stable average selling prices drove overall market revenue up 9.6% sequentially to $8.7 billion.

The market shares of AMD and Intel didn't change significantly from the third quarter, IDC said. Intel held a 76.7% share, a gain of 0.4%, and AMD had a 23.1% share, a loss of 0.4%. These shares were identical to those in the second quarter of 2007.

Shipments of server processors stood out in the fourth quarter, increasing 17% sequentially, IDC said. Shipments of mobile processors, such as those found in notebooks and tablet PCs, grew 10.3%, and shipments of desktop PC chips rose 6.5%.

IDC found that the percentage of high-end and mainstream processors shipped grew at the expense of low-end chips. In the desktop segment, for example, high-end and mainstream processors accounted for 87.1% of processors shipped, an increase of 2.5% over the third quarter.

Average selling prices were stable in the fourth quarter because shipments of server and mobile processors, which carry a premium over desktop chips, grew at a faster rate. In addition, shipments of high-end and mainstream chips grew faster than low-end products. Sales of the latter depend more on low prices.

IDC attributed the sales of higher-end products to the "aggressive pricing at which suppliers introduced new products in 2Q07 combined with the demand for more robust PC configurations necessary to support Windows Vista," Shane Rau, director of semiconductors for personal computing research at IDC, said in a statement.

"As the year progressed into 4Q07, the pricing drew in more buyers who wanted these relatively high-end products to support this operating system," Rau said.

For the full year, PC processor shipments increased 12.6% over 2006, and revenue grew 1.7% to $30.55 billion, IDC said. The disparity between the two percentages reflected the price drops that occurred early in 2007.

For the first half of this year, IDC issued what it called a "conservative forecast" for PC processor demand.

"While processor shipments typically decline about 6% to 7% between the fourth quarter and the first quarter, economic concerns in the U.S. and the effects on corporate and consumer systems purchases could mean a stronger sequential decline in 1Q08," Rau said. "However, the weakness in the U.S. dollar effectively means a price discount for overseas markets that are driving PC unit demand, so this could have a mitigating effect."

IDC expects shipments of mobile processors to continue on a double-digit growth track for 2008. Shipments of these processors are expected to surpass those for desktops in 2009, IDC said.