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Worldwide Demand for PC Microprocessors

Worldwide PC microprocessor shipments in the second calendar quarter of 2008 (2Q08) reached record levels again, according to the latest market data from IDC. The continued shift in demand raises questions about the long-term implications on the tech sector.

Despite the fact that the second quarter is typically the slowest quarter of the calendar year for processor demand, and concerns about the economic woes in the U.S., worldwide processor unit shipments grew 3.1 percent quarter over quarter and 16.1 percent year over year.

Strong vendor price competition in the middle and low-end of the desktop PC processor and mobile PC processor market segments caused overall market revenue to decline 4.5 percent quarter over quarter to $7.7 billion.

"While sequential market growth is unusual in the second quarter of the calendar year, it's clear that in 2Q08 Intel's processor shipments drove the growth," said Shane Rau, director at IDC.

"Intel's processor shipments alone grew nearly 4.3 percent over the first quarter and 20.8 percent year over year, while AMD's processor shipments were about flat."

Will the growth of personal computer use in developing countries continue to drive the majority of consumption? Moreover, with the rapid growth of both computer and Internet adoption in developing nations further shift the balance of power within the Global Networked Economy?

IDC forecasts that PC processor market revenue will grow 7.5 percent in 2008 to more than $32.8 billion. That said, apparently Intel is determined to follow the low-end expansion by adapting to the needs of consumers in China and India, amongst others.

Rau said "While processor unit shipments exceeded our forecast in 2Q08, Intel's aggressive approach to the market, through both product and low pricing, point to a major supply-side variable. However, economic concerns cause us to maintain our conservative outlook for the second half of the year."

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