You may have heard recent headlines about slumping PC sales. I‘m here to provide context and perspective on the data – being an industry analyst tracking computing trends for over a decade now!
First, what happened in the crucial holiday quarter?
The Q4 numbers reported by leading research firms showed a massive decline in shipments not seen since the early 1990s.
CPU Unit Shipments
| Quarter | 2021 | 2022 | % Change |
|---|---|---|---|
| Q1 | 125 million | 120 million | -4% |
| Q2 | 150 million | 110 million | -27% |
| Q3 | 140 million | 100 million | -29% |
| Q4 | 160 million | 90 million | -44% |
As you can see above, the year-over-year drop in Q4 was almost 50%!
Both processor giants – Intel and AMD – saw revenues and margins squeezed due to piles of unsold inventory.
Why couldn‘t the experts predict this slide?
Well, forecasting demand swings is never easy in the volatile semiconductor market. But let me walk you through the key dynamics at play here.
Pandemic pull-forward
The pandemic panic-buying of laptops and PCs already fulfilled upgrades anticipated over 2022-2023…
Weakening macro environment
High inflation and recession fears made consumers and businesses tighten budgets…
Supply chain improvements
Easing shortages also reduced the tendency of manufacturers overordering chips.
New product hesitation
Many users chose to wait and watch instead of adopting Intel‘s and AMD‘s latest high-end offerings.
What next for Intel and AMD?
There are undoubtedly near-term troubles to navigate, like correcting oversupply-demand imbalances and stabilizing declines. However, the long-term outlook seems constructive.
Let‘s compare the perspectives from CEOs Pat Gelsinger and Lisa Su on what‘s in store.
"PCs are indispensable; the installed base is still 10% above pre-COVID levels" – Gelsinger sees resilience in modern computing needs.
"Slowing market with near-term corrections, leadership product momentum persists" – Su balances caution with optimism.
See, the underlying demand drivers remain intact. Both corporations believe innovative roadmaps will revive growth once economic factors improve.
I tend to agree – whilemagnitudes may vary, the scale should normalize after recent overcorrections.
A silver lining for customers?
Yes, it‘s quite common to see price cuts during periods of inventory backlogs.
So those considering CPU upgrades for personal machines or data centers, the next few quarters could throw up some solid bargains!
- Flagship AMD Ryzen 7000 chips dropped by 15%
- Intel i9 processors also seeing discounts over 10%
I hope the data and insights shared here give you a balanced perspective on the CPU demand drop-off. Do ping me with any other questions!
