PC Processor Sales Slow In Q3PC Processor Sales Slow In Q3

Worldwide sales of PC microprocessors were weak in the third quarter, as skittish computer makers cut orders, a market research firm said.

Shipments and revenues in the quarter increased just 2.1% and 2.5%, respectively, from the second quarter. That's far below the average sequential change between the second and third quarter, IDC says. The average sequential increases for shipments and revenue are 10.6% and 9%, respectively.

Market demand in the third quarter was weak in July and August, as computer makers became "very reactive to any hint of slackening end demand," IDC analyst Shane Rau said.

"When they cut their PC build orders, like they did in late 2Q10 and the first half of 3Q10, not only did they cut their processor orders, they caused their contract manufacturers to cut orders for commodity components," Rau said in a statement. "The whole supply chain is skittish."

In looking at processor categories, IDC found that shipments of mobile PC chips grew 1.6% quarter to quarter, while shipments of server and desktop processors increased 4.1% and 2.4%, respectively.

On a year-to-year basis, the increase in shipments and revenue was much higher, given last year's more difficult economic conditions brought on by the global recession. Overall shipments and revenue of PC microprocessors rose 8.6% and 24.1% in the third quarter from the same period a year ago.

Shipments of mobile processors rose 13.3% year over year, while shipments of server and desktop chips increased 24.4% and 1.7%, respectively. The server increase reflects more spending on the part of businesses.

In the third quarter, Advanced Micro Devices and VIA Technologies saw their market shares rise at the expense of Intel. AMD's share rose 0.2% to 19.2% and VIA increased 0.1% to 0.4%. Intel's share fell 0.3% to 80.4%.

Rau said that sales in the fourth quarter will be "decent," but cautioned that year-over-year growth in the second half of this year will be lower than in the first half.

"For 2011, we believe that, even though the consumer segment will remain stalled in developed regions, IT executives will see PC upgrades as a priority over the next 12 months, which should result in double digit growth in PC systems and PC processors units next year," Rau said.

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