Atom pushes Intel to 87.4 percent of mobile CPU market

Research firm IDC reports worldwide processor shipments hit a new record level in Q3 2008, shipments grew 14 percent quarter-over-quarter and 15.8 percent year-over-year , while market revenue grew 7.6 percent quarter-over-quarter and 4.1 percent year-over-year to $8.3 billion.

The Intel Atom processor, which is mainly used in low-cost netbooks, was one of the primary reasons for the high growth. Without the Atom, shipments grew 8.3 percent quarter-over-quarter and 8.7 percent year-over-year.

Thanks to the strong sales of the Atom, chip giant Intel managed to grab 87.4 percent of the mobile processor market. In the overall market, Intel earned 80.8 percent marketshare, a gain of 1.1 percent, while AMD lost 1.2 percent to 18.5 percent. While the third quarter was really well, the outlook for the fourth quarter is murky as it's uncertain how the economic slowdown will affect the processor market.

"Not considering the effects of Atom, the overall market still grew at a decent pace in the third quarter,” said Shane Rau, director of Semiconductors: Personal Computing 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."

In terms of processor vendor shares, on an overall unit basis, Intel earned 80.8% market share, a gain of 1.1%, AMD finished with 18.5%, a loss of 1.2%, and VIA Technologies earned 0.6%.

By form factor, in the mobile PC processor segment, Intel earned 87.4% share, a gain of 0.8%, AMD finished with 11.5%, a loss of 1.1%, and VIA earned 1.2%, a gain of 0.3%.

In the PC server/workstation processor segment, Intel finished with 85.6% market share, a loss of 0.6% and AMD earned 14.4%, a gain of 0.6%. In the desktop PC processor segment, Intel and AMD earned 73.5% and 26.4% share respectively; share changes were negligible.

Due to the market's strong performance through the first three quarters of 2008 and anticipated high volume of Atom processors, IDC has raised its PC processor market unit forecast for this year to 18.0%. However, the worldwide demand environment looks weak, and both Intel and AMD indicated an uncertain outlook for the market. As a result, IDC is conservative about 2009 and will be lowering its upcoming unit forecast for the year.