Building a new niche

Global microship sales rose one percent in March, reversing three straight months of declines, but coming up short of expectations for the year so far due to falling prices. March sales were US$20.3 billion, compared to US$20.1 billion in February and 3.2 percent higher than the US$19.7 billion a year earlier, the Semiconductor Industry Association said.

However, rising unit shipments of memory chips, mobile telephone processors and other semiconductors were more than offset by falling prices, the SIA said.“An abundant supply of chips for these applications resulted in declining average selling prices as manufacturers sought to hold onto market share,” SIA president George Scalise said in a statement. “Sales for the year to date are running slightly ahead of last year’s record level, but well short of the 10 percent growth projected in the forecast issued by the SIA last November,” Scalise said.

The SIA expects sales for all of 2007 to hit nearly US$274 billion after growing nine percent to US$248 billion in 2006.

However the SIA figures cover all kinds of chips, such as computer processors made by Intel, memory chips made by Samsung Electronics and mobile telephone chips produced by Texas Instruments.

Before local white-box builders can throw themselves a party, global analyst Gartner believes worldwide PC shipments increased nine percent in the first quarter of 2007.

Worldwide PC shipments totalled 62.7 million units in the first quarter of 2007, an 8.9 percent increase from the same period last year, according to preliminary results from the analysts. The worldwide total is in line with Gartner’s earlier projections; however the geographic regions showed mixed results.

In Asia Pacific, PC shipments reached 15.7 million units, a 10.3 percent increase from the first quarter of last year. The overall market performance was slightly less than projected due to weaker desk-based PC growth. In China, the first quarter is traditionally the weakest shipment quarter of the year due to the Lunar New Year celebrations. However, the PC market in China grew 15.2 percent in the first quarter, with desk-based PC growth of 10.1 percent and mobile PC growth of 38.3 percent.

Chips, chips and more chips
In the face of increasing competition from Intel’s new chips and price cuts, AMD has seen the market share in the x86 processor market it built in 2006 all but erode by the end of the first quarter of 2007, according to the latest figures from research firm Mercury Research. Since launching its Opteron processor in 2003, AMD had managed to chip away at Intel’s market share for x86 processors, as it beat Intel to market with dual-core systems and led the price/performance curve. At the height of its growth last year, AMD was shipping 25 percent of all x86 PC processors for desktops, notebooks and servers worldwide, according to Mercury. But as Intel struck back with its Core 2 Duo processors and quad-core chips, and a raft of price cuts, AMD’s share fell below 19 percent again by the end of March this year, while Intel’s ballooned past 80 percent, according to Mercury.

Analysts note, however, that AMD’s current market share is higher than these percentages

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