Chip sales rebound in the second quarter

Intel's Atom leads the way

Atom shipments rose 34 per cent in the second quarter

Processor sales rose by over 10 per cent in the second quarter of 2009, compared to a drop of more than 10 per cent in the first quarter, according to the latest figures from IDC.

Intel's Atom processor led the field with a 34 per cent increase in shipments in the second quarter. The general move to smaller, lower powered processors did much to help the ailing chip market.

However, IDC warned that the figures do not necessarily signal a return to growth in the chip market, but that system builders are building up inventory in certain segments.

"The percentage of Intel's revenue earned in Asia/Pacific grew from 51 per cent in the first quarter of 2009 to 55 per cent in the second quarter," said Shane Rau, director of semiconductors: personal computing research at IDC.

"This fact, combined with the significant sequential 'snap-back' rise in Intel's overall processor shipments, particularly Atom shipments, while AMD's overall shipments were about flat, indicate that the PC processor market did not recover in the second quarter.

"Instead, the market balanced out due to Intel driving Atom processors into original design manufacturers [ODMs] that manufacture the systems, particularly in China and Taiwan."

The Atom processor is the core for much of the netbook market, which has been the main growth engine for PC sales so far this year.

Intel had a second-quarter market share of 78.9 per cent, followed by AMD with 20.6 per cent and Via Technologies with 0.5 per cent.

However, much of the sales in the second quarter did not reflect business and consumer demand and were more about manufacturers building stock, IDC reported.

"IDC believes that ODMs and original equipment manufacturers have balanced out their inventories, so we cannot rely on inventory replenishment to drive market improvements," said Rau.

"Instead, we can only rely on actual end demand, and that means we have to be cautious not to be over-exuberant that, say, the traditional back-to-school PC buying season will materialise into a bullish second half. It won't."