Intel Atom sales boost global chip market

Strong sales of Intel's Atom chip accounted for about half of the growth of the entire world microprocessor market in the third quarter, according to a new report from research firm IDC.

The report, released on Monday, follows a mid-October IDC study, which found netbooks — the mini-laptops for which the Atom chip is designed — helped the overall EMEA PC market grow 27 percent in the third quarter of 2008 over the same quarter last year, largely fuelled by consumer demand.

Netbooks are small, relatively inexpensive laptops that are often purchased as a supplement to an existing desktop or laptop. Mature markets such as the US and Europe account for some of the highest netbook sales, according to IDC.

Worldwide shipments of processors for PCs and servers grew 15.8 percent in the third quarter compared with the same period a year ago, with revenue increasing four percent to a total of $8.3bn (£5.25bn), IDC said. By the end of the year, netbook shipments are expected to exceed 10 million units.

Recent netbook releases include late-October models from HP and Dell.

Without counting the Atom processor, the increase in shipments would only be about eight percent. However, this figure is still respectable, said IDC analyst Shane Rau.

"Not considering the effects of Atom, the overall market still grew at a decent pace," Rau said in a statement. "Intel's and AMD's shipments grew at a rate only slightly slower than typical for a third quarter; seasonal demand appeared reasonable up until September. By segment, while the mobile-processor segment grew aggressively, the server segment was soft."

Since September, however, the international financial crisis has grown more serious, and this is likely to have an impact on fourth-quarter figures, IDC said.

On Friday, Intel warned the credit crisis could hurt demand for its chips and lead to the insolvency of key suppliers, potentially resulting in product delays. Intel has forecast its fourth-quarter revenues at between $10.1bn and $10.9bn, weaker than typically seen in the period running up to Christmas. The company is to publish a mid-quarter update on 4 December.

In the overall x86 market, Intel's share was about 80 percent, up 1.1 percent from the same quarter a year ago, while principal competitor AMD lost 1.2 percent for a total of 18.5 percent. Via Technologies, which concentrates on mobile chips, controlled less than one percent of the total market.

In mobile chips, Intel accounted for about 87 percent of the market, AMD 11.5 percent and Via 1.2 percent. Intel shipped about 73.5 percent of all desktop chips, with 26.4 percent for AMD.

AMD gained share over Intel in the server and workstation market, rising less than one percent from the previous year to stand at about 14 percent. Intel lost about one percent, falling to 85 percent of the segment.

IDC said it would raise its chip forecast through 2008 to 18 percent growth, but said it is expecting to lower its estimates for next year.