PC processor shipments break record

PC processors are the latest tech segment bouncing back from the recession.

Third-quarter shipments of computer processors, or CPUs, climbed 23 percent over the second quarter of 2009, doubling typical growth and setting a record for sequential growth, according to an IDC report released Monday.

Revenue from processor sales also bounced back to hit $7.4 billion, a 14 percent gain over the second quarter, according to IDC's "Worldwide PC Processor 3Q09 Vendor Shares" report.

IDC viewed the record levels in shipments as a promising sign in economic recovery.

"Most meaningful about 3Q09 is that, since PC processor shipments overall just slightly exceeded shipments in 3Q08--which was itself a record quarter at the time--we know that the processor market is recovering," Shane Rau, IDC's director of semiconductors for personal computing research, said in a statement.

With the popularity of Netbooks, mobile processors such as Intel's Atom chip drove much of the growth. Shipments of the mobile CPUs jumped 35.7 percent over the second quarter, while desktop processor shipments rose 11.4 percent sequentially. Since mobile processors are cheaper than their desktop counterparts, their growth in revenue trailed the growth in shipments.

"The story about 3Q09 leads with Atom processors being sold in mini-notebooks (a.k.a. Netbooks) manufactured and sold in China," said Rau. "While Atom processors led the PC processor market to reach record unit shipments, on the revenue side, their low average selling price led to notable price erosion, more than 7 percent."

Among vendors, Intel kept its place at the top of the charts, enjoying an 81.1 percent share of the worldwide market for processor shipments. That left AMD with 18.7 percent and third-place Via Technologies with 0.2 percent.

By processor type, Intel captured 88 percent of the mobile PC processor market, leaving Advanced Micro Devices with 11.9 percent, and Via with the rest. For desktop CPUs, Intel's slice was smaller at 72.2 percent, while AMD grabbed a 27.4 percent chunk and Via held a 0.3 percent share.

Solid demand so far in the fourth quarter led IDC to raise its expectations for 2009. The firm is now eyeing more than 300 million shipments of processors for the year, a gain of 1.5 percent over 2008.

Still, since much of the growth came from low-cost mobile processors and certain areas of the economy remain sluggish, IDC is cautious about early 2010.

"The market's growth has been due to shipments of inexpensive Atom processors being sold into markets like China, which is being stimulated by government incentives there," Rau said. "The Chinese market can be very opaque--there are lots of places where inventories can hide. We have to be on the lookout for when China decides it can't consume more processors. Meanwhile, the U.S. market is still hamstrung by housing foreclosures and rising job losses."