AMD Barcelona delays helping Intel, analyst says

American Technology Research semiconductor analyst Doug Freedman believes most parts of the PC hardware supply chain in Q1 are tracking in-line with normal seasonality. Freedman also believes Intel is seeing strong demand for server parts as channel and OEM customers await volume shipments of competitive high-end quad cores from AMD.

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 3/13/2008

Semiconductor analyst Doug Freedman with financial research company American Technology Research said in a report today that he believes most parts of the PC hardware supply chain in Q1 is tracking in-line with normal seasonality.

“We believe the PC food chain is acting normal for this time of the year with sell-through generally down,” Freedman said in the report.

Notebooks are growing as a percentage of total units with strong builds for low-end products likely to benefit Intel this quarter in terms of unit share, based on the company’s data.

Freedman also believes Intel is seeing strong demand of server parts as channel and OEM customers await volume shipments of competitive high-end quad-cores from AMD, and that delays by AMD with Barcelona continue to hurt the company as the server replacement cycle driven by virtualization would have been a strong back-drop from which to introduce a compelling Opteron follow-on part.

“Progress on AMD next generation server product Shanghai remains a tightly held secret and we continue to search for data points regarding the performance progress and release date,” he noted.

Market research company IDC Wednesday said it projects worldwide PC shipments to grow by 12.8% in 2008 to reach 302 million units, with growth expected to continue at above 11% in 2009 followed by high single-digit growth through 2012, boosting annual shipments to over 426 million in 2012, IDC said.

Overall PC volume growth, combined with a steady transition to portable PCs, which generally cost more than desktops, will help offset falling average prices, and the total value of PC shipments projected to grow by 7.4% in 2008 to nearly $280 billion, while shipment value will continue to grow by roughly 4% annually from 2009 through 2012, reaching nearly $330 billion by 2012, the company noted.

Portable PC adoption remains the primary driver in all regions, nearly matching record quarterly growth in Q3 2007, and record annual growth in 2005. Increases of more than 50% in Asia/Pacific (excluding Japan) and the rest of world helped boost these regions to more than 36% of portable volume, while the US and Western Europe saw growth above 20% and continue to account for more than 50% of Portable volume, IDC said.

Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker commented in a statement, “The deteriorating economic environment can certainly put a damper on PC growth. However, fourth quarter growth was the fastest since mid 2005 and we should see continued Portable adoption and PC acquisition by both Commercial and Consumer segments. Replacements in mature regions supported by ongoing rapid growth in new users in emerging regions will add to pervasive technology evolution and falling prices to sustain growth.”

Finally, IDC added that lower cost consumer notebooks continue to drive PC market growth in all regions around the world as consumers are increasingly seeing notebooks as essential personal communication and information gathering tools and we expect that will continue to drive growth and higher PC penetration ratios for several years to come.

Last week, iSuppli Corp released its ranking of PC OEMs, with Acer overcoming Lenovo as the no. 3 PC OEM, nipping at Dell’s heels for no. 2 spot.