Components | December 23, 2011
Atom bomb doesn’t detonate Intel’s microprocessor business in Q3
Despite a plunge in sales of its Atom chips destined for the moribund netbook market, Intel in the 3Q managed to expand its leadership position in the global microprocessor business on the strength of its corporate sales.
Intel in the third quarter accounted for 83.7 percent of global microprocessor revenue, up 1.2 percentage points from the 82.5 percent it held in the second quarter of 2011, according to IHS iSuppli. The company expanded its lead over No. 2 microprocessor supplier Advanced Micro Devices Inc. to 73.5 percentage points in the third quarter, up from 72 percent in the second quarter. Note: The market share numbers presented in this release consist of the entire global microprocessor market, including X86, RISC, and other types of general-purpose microprocessors. This data is not limited to the X86 chips used in the PC market, although these types of devices represent the vast majority of shipments. Intel’s performance in the third quarter was the result of a mix of positive and negative developments related to the transformative impact of media tablets on the computer market. “The boom in media tablet sales has packed both upsides and downsides for Intel—hurting its business in netbook microprocessors—but boosting its sales of chips used in data centers to support cloud computing,” said Matthew Wilkins, principal analyst for compute platforms research at IHS. “Because of its broad product line that addresses both the consumer and business side of the microprocessor business, Intel in the third quarter managed to outperform the overall market. Even with the company warning that its fourth-quarter revenue will fall short of expectations, the company still is expected to expand its lead in the global semiconductor market based on its strong performance in the third quarter and the rest of the year.” Net declines for netbooks After enjoying double-digit shipment growth from 2008 through 2010, the netbook market commenced a decline in 2011 as consumers turned toward media tablets. Global netbook shipments are set to weaken to 21.4 million units in 2011, down 33.5 percent from 32 million in 2010. Shipments are expected to continue to decrease during the coming years and will dwindle to 13.4 million units in 2015. This has come as a downside for Intel, whose Atom microprocessors powered the majority of netbook PCs. Intel said its Atom microprocessor and chipset revenue in the third quarter fell 32 percent compared to the year earlier. Up in the cloud On the other hand, Intel said it saw continued strength in the third quarter from the sales of microprocessors for use in data centers because of rising demand from the mobile and cloud computing markets. The cloud computing market is heading into the stratosphere as companies seek to offer services designed to serve tablets, smartphones and other mobile devices. Consumer and enterprise spending on the public segment of the cloud is projected to surge to $110 billion in 2015, up from $23 billion in 2010. Intel also said it benefited from strong notebook sales. Many of these sales were to the corporate market, which continues to perform well even amid challenging circumstances in the consumer PC segment. Thailand impact Intel this month warned its fourth-quarter results are expected to fall short of the company's previous outlook due to hard disk drive (HDD) supply shortages spurred by the Thailand flood. Short supplies of HDDs in the fourth quarter will result in PC shipments failing to meet expectations in the first quarter of 2012. IHS predicts that worldwide PC shipments in the first quarter of 2012 will amount to 84.2 million units, compared to the earlier forecast of 88 million. This is taking a toll on Intel, which in the fourth quarter is making microprocessors set to be used in PCs shipping during the first quarter. Nevertheless, IHS continues to predict that Intel will expand its leadership position in the global semiconductor market for the entire year of 2011, based on strong shipments of microprocessors in the third quarter and the rest of the year. IHS recently predicted that Intel in 2011 will increase its lead in the total semiconductor market over second-ranked Samsung Electronics Co. Ltd. to 6.5 percentage points, up from a 3.9-point difference in 2010. No advance for Advanced Micro Devices AMD’s market share was largely unchanged in the third quarter, with a slight 0.3 percentage point decline from the second quarter. The company accounted for 10.2 percent of worldwide microprocessor market revenue, down from 10.5 percent in the second quarter.
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