Tue, Dec 27, 2011 - Page 11 News List

Broad base helps Intel expand lead over rivals

UPBEAT:Intel’s diverse product line helped raise its share of the global microprocessor market by 1.2 percentage points between the second and third quarters of this year

By Kevin Chen  /  Staff Reporter

Intel Corp is set to expand its lead over its rivals this year despite a plunge in sales of its Atom chips and its downward revision of fourth-quarter revenue, according to the latest IHS iSuppli Computer Systems research note.

The Englewood, Colorado-based researcher said this year’s sales boom in tablet devices has had both positive and negative impacts on Intel, as the world’s largest semiconductor maker saw falling sales of its Atom chips because of weakening netbook shipments, but experienced rising demand for its chips used in data centers to support cloud computing.

Because of the impact of cannibalization by tablets, global netbook shipments are expected to reach 21.4 million units this year, down 33.5 percent from 32 million units last year, the researcher said, adding that the figure would continue to drop to 13.4 million units in 2015.

However, the cloud-computing services business is set to further expand as demand for tablets, smartphones and other mobile devices is rapidly rising, the researcher said.

Based on IHS iSuppli’s estimate, consumer and corporate spending on cloud-computing services is expected to increase to US$110 billion in 2015 from the US$23 billion recorded last year.

“Because of its broad product line that addresses both the consumer and business side of the microprocessor business, Intel in the third quarter managed to outperform the overall market,” IHS analyst Matthew Wilkins said in a statement issued on Thursday last week.

In the July-to-September period, Intel accounted for 83.7 percent of global microprocessor revenue, up 1.2 percentage points from the 82.5 percent it held in the second quarter and compared with 80.9 percent a year earlier, the researcher said.

Advanced Micro Devices Inc (AMD), meanwhile, accounted for 10.2 percent of global microprocessor revenue in the third quarter, down from a 10.53 percent share it held in the previous quarter and less than its 11.45 percent share a year ago, it said.

“Even with the company warning that its fourth-quarter revenue will fall short of expectations, the company still is expected to expand its lead in the global semiconductor market based on its strong performance in the third quarter and the rest of the year,” Wilkins said in the statement.

On Dec. 12, Intel revised -downward its fourth-quarter revenue forecast to a range between US$13.4 billion and US$14 billion, from the previous guidance of between US$14.2 billion and US$15.2 billion, as a shortage of hard-disk drives caused by flooding in Thailand affected global PC sales, according to a company statement posted on its Web site.

Intel is among several major semiconductor companies that have recently lowered their fourth-quarter outlook on weak PC demand. Earlier this month, both Texas Instruments Inc and Altera Corp revised downward their fourth-quarter guidance because of the Thai floods, while AMD last month announced plans to cut 1,400 jobs.

In view of the hard-disk drives supply shortages in the fourth quarter, IHS said it predicted global PC shipments to reach only 84.2 million units in the first quarter of next year, down from its earlier forecast of 88 million units.

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