Processor shipments experience biggest decline in 30 years, second time in last year

big picture: Reports continue to come in indicating that 2022 has been a historically tough year for hardware sales in the tech industry. During the year, PC processor sales experienced not one, but two record quarterly declines. And yet AMD managed to win market share in both cases.

Mercury research writes (via Tom’s Hardware) that Q4 2022 saw the biggest drop in PC processor shipments in three decades. If this reading gives you a sense of déjà vu, it’s because the same thing happened earlier in the year.

The same market research team reported that desktop processor sales in the second quarter of 2022 experienced the biggest year-over-year decline since they began recording this data in 1994. write down. What’s more, third-party data leads Mercury to conclude that 2022 represents the biggest decline in PC processor history.

Excluding Arm processors, about 374 million processors were shipped in 2022, down 21 percent from 2021. Processor revenue in 2022 fell 19 percent to $65 billion. The main reason is inventory adjustments, which had a larger impact than lower sales. This means that although shipments have fallen sharply, this does not necessarily indicate the same sharp drop in sales to end users.

Data: Mercury Research

Another important detail is that the downturn hit x86 processors the most. Recent reports show that Arm processors are gaining market share in laptops, suggesting they haven’t suffered the same blow that x86 processors experienced last year.

Appliance makers have struggled to increase inventories after supply chain shocks starting in 2020 coincided with rising demand. This has led to oversupply, which, combined with falling demand in 2022, has meant bad financials for almost everyone.

DRAM revenue last year experienced the biggest global drop since the 2008 financial crisis. Desktop GPU sales were the lowest since 2005. Companies like Nvidia and AMD have cut their orders from TSMC. Falling demand for smartphones led to Samsung’s 8-year quarterly low and Apple’s biggest quarterly drop in revenue since 2016.

Like some analyzes in other sectors, Mercury expects the volatile CPU shipments to continue in the first half of 2023 before turning around in the second half of the year.

When Mercury released the numbers for the second quarter of 2022, they showed an increase in market share for AMD that was repeated in the fourth quarter. From 2021 to 2022, Team Red’s share of the x86 processor market has grown from 23 percent to 30 percent. Most of this growth has been in the server processor market, although Intel has increased its share of the mobile processor market.