IDC lowers growth forecast for processor shipments

IDC dropped its growth forecast for yearly processor shipments worldwide due to a slowdown in consumer laptop sales in mature markets such as the U.S. and Europe.

Global microprocessor shipments will now grow by 9.3% this year compared to last year, lower than the 10.3% growth previously forecast, IDC said Tuesday.

"Due to economic headwinds in developed regions that are affecting consumer PC demand, IDC has reduced its forecast," the company said in a statement. IDC tallies x86 microprocessor shipments for laptops, desktops and servers sold by Intel, Advanced Micro Devices and Via Technologies. The numbers do not include processors such as Intel's Itanium, Oracle's SPARC or IBM's Power, which are based on different architectures.

IDC last month reported slow gains in PC sales for the second quarter, partly due to weakened spending and the growing interest in tablets. Worldwide PC shipments totaled 84.4 million units during the second quarter, growing by just 2.6% compared to the year-ago quarter, IDC said.

The PC market was hurt by the decline in netbook demand, which made up 12% of PC shipments in the second quarter, compared to 22% in the year-ago quarter, according to IDC. The PC market was also hurt by economic weakness in the U.S. and Europe, while Asia-Pacific was comparatively stable, with PC shipments growing by 12% year-over-year.

Worldwide microprocessor shipments during the second quarter were flat compared to last year's second quarter, IDC also said in the study. Shipments grew by only 0.6%.

Intel lost processor market share to AMD during the quarter, IDC said. Intel had a 79.3% market share, down from 80.7% in last year's second quarter. AMD had a 20.4% market share, gaining from 19% last year.

AMD took share from Intel in the laptops and desktop processor segments, but lost share in server chips. AMD held a 15.2% market share in laptops, up from 13.7%, while Intel's market share was 84.4%, down from 86.1%.

AMD's share in desktop processors was 28.9%, up from 27.3% in last year's second quarter. Intel's share dropped to 70.9% from 72.2%. Intel was dominant in server processors with a 94.5% market share, while AMD's share slipped to 5.5% from 6.5% a year earlier.

IDC did not return requests for comment on why AMD gained market share. But AMD's latest Fusion chips, which integrate a CPU and graphics processor inside a single chip, have sold well. Laptops with AMD's most recent Fusion chip code-named Llano became available recently in PCs from HP, Toshiba and Samsung with prices between $500 and $700. AMD last month said it shipped around 12 million Fusion processors in the second fiscal quarter that ended on July 2. Fusion processors made up around 70% of AMD's mobile chip shipments.

Slow demand for netbooks hurt Intel's Atom processor shipments during the second fiscal quarter ending on July 2, the company said on an earnings call last month. However, its latest Core processors based on the Sandy Bridge architecture were doing well, especially in the corporate market. Intel's Core i3, i5 and i7 processors made up about 66% of the company's overall chip shipments, Intel said.

Copyright © 2011 IDG Communications, Inc.

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