It’s no secret that the PC business and the tech industry as a whole are going through some rough waters.But a new report written by Dean McCarron Mercury Research It paints an incredibly dark picture of the state of things. Perhaps the biggest shocker is that the numbers show the x86 processor market has endured “the largest quarterly and yearly decline in its 30-year history.” Based on previously published third-party data, McCarron is also reasonably confident that the numbers for the fourth quarter and full year of 2022 represent the worst recession in his PC processor history. I’m here.
The observed x86 processor recession was caused by a dreadful combination of declining demand and destocking. This threatening scissors move will see 2022 shipments drop to 374 million processors (excluding ARM), down 21% from 2021. Revenues of $65 billion were down 19% year over year. McCarron is a ray of light in this darkness, a reminder that overall processor revenues in 2022 were still higher than any year before the 2020s began.
A different light shone on AMD with an increase in server CPU shares, one of the only segments to see some growth in Q4 2022. AMD also gained market share in the shrinking desktop and laptop markets. For more AMD-specific financial and sales performance data, please refer to our press coverage for Q4 2022 and fiscal 2022 results. Mercury also shared some charts for those interested in the overall x86 CPU market share and share by segment. The key observation here is that AMD’s overall market share growth has skyrocketed from around 23% of the x86 market in 2021 to nearly 30% in 2022.
Inventory adjustments can have a greater negative impact than reduced sales
McCarron emphasized that Mercury’s pessimistic stats for x86 shipments through 2022 do not necessarily correlate directly with shipments of x86 PCs (processors) to end users. We mentioned earlier that destocking and slowing sales were the two downward drivers, but which played the most significant role in this x86 record slump?
Analysts at Mercury Research explained, “Most of the drop in shipments is due to excess inventory shipments last quarter that are impacting current sales.” With such a perfect storm raging, “CPU suppliers are also deliberately restricting shipments to increase inventory consumption rates… [and] PC demand for processors is declining and PC OEMs are also reducing inventories as macroeconomic concerns abate. “
Mercury also argued that the trend is likely to continue through the first half of 2023. The company’s thoughts on a potential inventory hoax should also be evidenced by upcoming financials from major players in the coming months.
Several big tech companies and analysts seem to suggest that the second half of 2023 will be a turning point, an inflection point where the downtrend is broken. This also applies to Mercury reports. Of course, we hope that the second half of 2023 will have enough of the very exciting CPU, GPU and related tech improvements to reignite the PC market (besides world peace). .
