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Processor shipments hit record levels in Q4 2007, Intel gains 0.4%

Posted on Wednesday, January 23 2008 @ 00:05:20 CET by

Research firm IDC reports worldwide processor shipments grew 8.5% sequentially in Q4 2007. Growth in overall unit shipments and stable average selling prices stimulated overall market revenue to grow 9.6% sequentially to $8.7 billion.

Shipments of processors designed for PC servers stood out in the quarter, growing 17.0% sequentially. Shipments of processors for mobile PCs grew 10.3%, while processors for desktop PCs grew 6.5%. IDC analysis also reveals that, within each form factor, the percentage of high-end and mainstream processors grew at the expense of low-end processors. For example, in the desktop processor segment, high-end and mainstream processors represented 87.1% of processors shipped in 4Q07, up from 84.6% in 3Q07.

"Overall market pricing was very stable in the quarter,” said Shane Rau, director of Semiconductors: Personal Computing research at IDC. “Since server and mobile processors carry a premium over desktop processors and they grew more than desktop processors, they buoyed the market average price. The fact that the high-end and mainstream segments within all form factor segments grew faster than the value segments kept pricing even firmer. We attribute this result 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. As the year progressed into 4Q07, the pricing drew in more buyers who wanted these relatively high-end products to support this operating system."

For the full year 2007, total worldwide PC processor shipments grew 12.6% compared to 2006. Total revenues grew 1.7% to $30.55 billion. The disparity of unit growth and revenue growth indicates the degree of price erosion that occurred early in the year 2007.

Vendor Highlights
Processor vendor shares in 4Q07 did not change significantly from those in 3Q07. On an overall unit basis, Intel earned 76.7% market share, a gain of 0.4%. AMD earned 23.1%, a loss of 0.4%. These shares are identical to the shares of 2Q07.

By form factor, market share changes were very modest. In the mobile processor segment, Intel earned 81.9% share, a gain of 1.1% and AMD earned 17.8%, a loss of 1.1%. In the PC server processor segment, Intel earned 85.4%, a loss of 0.6% and AMD earned 14.6%, a gain of 0.6%. In the desktop PC processor segment, Intel earned 72.1% share and AMD earned 27.7%; share changes were negligible.

Market Outlook
IDC has a conservative forecast for PC processor demand in 1Q08 and 2Q08. “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," added Rau. "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 that mobile processors will continue their strong growth in 2008. "Despite how overall demand may affect them in the first half of 2008, mobile processors will continue on a double-digit growth track for the year and on track to surpass desktop processors in 2009, " said Richard Murphy, IDC Inquiry Analyst.



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