Intel and AMD see end of desktop PC
The PC market was once the engine room of the global semiconductor market. But no longer.
The two largest microprocessor suppliers to the PC market, Intel and AMD, see sales under pressure as smartphones and tablets take over as the chip market’s biggest revenue source.
“The PC industry is going through a period of very significant change that is impacting both the ecosystem and AMD,” said Rory Read, AMD president and CEO.
The shift from desk top computing to mobile is happening faster than everyone expected.
“The trends we knew would re-shape the industry are happening at a much faster pace than we anticipated,” said Read.
Following a loss of $157m in Q3, Read said he will quickly refocus the business away from the PC market.
“Our restructuring efforts are decisive actions that position AMD to compete more effectively and improve our financial results,” said Mr. Read.
Intel is the biggest processor supplier to the PC market and earlier this week it reported Q3 revenues of $13.5bn which was 5.45% down on Q3 2011. Profit of $2.97bn was 14% down.
Intel’s PC revenue of $8.6bn was flat compared to Q2 and down 8% on Q3 last year.
The trend is clear. Low power processing in mobile devices like the smartphone and tablet has shifted the microprocessor market away from power hungry desktop processors to leaner and more integrated system-on-chip devices.
Intel has been trying to follow this trend which has seen the rise of the ARM processor as a credible competitor to the x86 architecture.
It now seems the shift from desktop to mobile PCs is accelerating faster than anyone imagined.
Which is why AMD has pressed the panic button.
“Reducing our workforce is a difficult, but necessary, step to take advantage of the eventual market recovery and capitalize on growth opportunities for our products outside of the traditional PC market,” said Read, yesterday.