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Chip market rebounds in Q2, but IDC cautious on Q3

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Chip market rebounds in Q2, but IDC cautious on Q3

San Mateo (CA) – Worldwide PC microprocessor shipments in the second quarter rose significantly, says IDC. While the increase is ‘unusually positive’ for the second quarter, IDC reckons that Intel and OEM inventory refreshes were behind the rise, rather than the return of significant end demand for PCs.

PC processor unit shipments rose 10.1 percent from 1Q09 to 2Q09, compared to a 10.9 percent drop from 4Q08 to 1Q09. Unit shipments declined seven percent year on year. Market revenue increased 7.9 percent  from 1Q09 to 2Q09, compared to -11 percent from 4Q08 to 1Q09.

Second quarter revenue declined 15.3 percent compared to the same quarter in 2008, but Intel’s overall PC processor shipments increased 12.5 percent from 1Q09 to 2Q09. AMD’s overall PC processor shipments increased 1.8 percent in the same period.

Intel’s shipments of Atom netbook chips was up 34 percent in 2Q09 compared to 1Q09. IDC says this indicates that OEMs, having held off buying Atom processors in 1Q09 and depleted their inventories, began refreshing those inventories in 2Q09. The outfit estimates that the cheap Atom processors for mini-notebook PCs represented 25 percent of Intel’s mobile PC processor shipments in 2Q09 and 8.1 percent of revenues in 2Q09.

“The percentage of Intel’s revenue earned in Asia/Pacific grew from 51 percent in 1Q09 to 55 percent in 2Q09,” says Shane Rau, director of Semiconductors and Personal Computing research at IDC. “This fact, combined with the significant sequential ‘snap-back’ rise in Intel’s overall processor shipments – particularly Atom shipments – while AMD’s overall shipments were about flat, indicate that the PC processor market didn’t recover in 2Q09. Instead, the market balanced out due to Intel driving Atom processors into ODMs who manufacture the systems, particularly in China and Taiwan.”

In 2Q09, Intel had 78.9 percent unit market share, a gain of 1.6 percent, while AMD managed 20.6 percent, down 1.6 percent. Via brought up the rear with 0.5 percent of the market.

IDC stressed that it cannot yet say that the PC processor market is recovering and is in a weak condition:

“Going forward, IDC believes that ODMs and OEMs have balanced out their inventories and so we can’t rely on inventory replenishment to drive market improvements,” adds Rau. “Instead, we can only rely on what actual end demand really is, and that means we have to be cautious not to be over-exuberant that, say, the traditional back-to-school PC buying season will materialize into a bullish second half. It won’t.”

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