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IDC warns of PC chip slowdown

IDC warns of PC chip slowdown

For the second quarter in a row, the global PC processor market hit a record number of unit shipments in the fourth quarter of 2007, according to IDC. At the same time, the market research company predicts that a slowing economy will likely lead to declining sales in the first months of 2008.

"While processor shipments typically decline about six percent to seven percent 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," noted IDC analyst Shane Rau in a statement. "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 reported on Tuesday that PC microprocessor shipments grew 8.5 percent sequentially in Q4. Growth in overall unit shipments and stable average selling prices stimulated overall market revenue to grow 9.6 percent sequentially to $8.7 billion, according to IDC.

"Overall market pricing was very stable in the quarter," Rau said. "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."

Rau noted that the price war that chip manufacturing rivals such as Intel Corp. and Advanced Micro Devices Inc. waged for much of past year -- especially during the second quarter -- affected the quarterly results. The low prices drew in more buyers, he said.

Market-share numbers didn't change significantly for the major players in the chip market.

IDC reported that on an overall unit basis, Intel held a 76.7 percent market share, up 0.4 percent. AMD earned 23.1 percent, down 0.4 percent in comparison with the previous quarter. The share numbers are identical to those reported in the second quarter of 2007.

Market-share numbers also didn't change much according to design. In the mobile processor segment, Intel's grew by just 1.1 percent to 81.9 percent, while AMD's share fell the same amount to 17.8 percent. In the PC server processor segment, Intel's fourth-quarter share fell less than one percent to 85.4 percent, while AMD's grew by 0.6 percent to 14.6 percent. Intel held a 72.1 percent share and AMD a 27.7 percent share of the desktop PC processor market, virtually the same as the previous quarter.

Last month, market research firm iSuppli Corp. reported that China's semiconductor market was on track to grow 15 percent in 2007. China's semiconductor revenue was expected to reach $52 billion in 2007, up from $45 billion in 2006, according to the iSuppli report.


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