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PC Microprocessor Upside and Downside

Worldwide PC microprocessor shipments in the third calendar quarter of 2008 (3Q08) reached record levels again, according to the latest market study by IDC.

However, the outlook for the processor market in 4Q08 and 2009 is unsure.

Worldwide PC processor unit shipments grew 14.0 percent quarter over quarter (QoQ) and 15.8 percent year over year (YoY); market revenue grew 7.6 percent QoQ and 4.1 percent YoY to $8.3 billion.

Intel's new Atom processor for ultra low-cost mobile PCs made a notable difference in the overall market performance; without Atom, unit shipments grew 8.3 percent QoQ and 8.7 percent YoY.

"Not considering the effects of Atom, the overall market still grew at a decent pace in the third quarter," said Shane Rau, director of research at IDC.

"Intel's and AMD's shipments grew at a rate only slightly slower than typical for a third quarter, and seasonal demand appeared reasonable up until September. By segment, while the mobile processor segment grew aggressively, the server segment was soft."

Due to the market's strong performance through the first three quarters of 2008 and anticipated high volume of Atom processors, IDC has raised its PC processor market unit forecast for this year to 18.0 percent.

However, the worldwide demand environment looks weak, and both Intel and AMD indicated an uncertain outlook for the market. As a result, IDC is conservative about 2009 and will be lowering its upcoming unit forecast for the year.

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