During the first quarter of 2023, sales of PC processors have plummeted. For the first time in many years AMD has taken a loss as a result of a 64% drop in CPU sales, and Intel hasn’t fared much better. In fact, its microprocessor sales have fallen a historic 36%. The bump that these two companies have given leaves no room for doubt about how battered the PC market is right now. And the economic situation is not helping.
To understand what is happening, it is important that we look back for a moment and remember where we came from. During 2020 and 2021, which were the toughest pandemic years, laptop and desktop manufacturers made a killing and sold almost everything they could make. The rise of teleworking and a favorable economic situation unleashed a tailwind that placed these companies in a very sweet moment.
However, at the beginning of 2022 the first dark clouds appeared. In April IDC confirmed that during the first quarter the global distribution of desktops, laptops and workstations decreased by 5.1%. It may not sound like much, but it was only the beginning of a very steep hill. And it is that at the beginning of October Gartner quantified the drop in units distributed during the third quarter of 2022 by 19.5% compared to the same period in 2021. That of 2023 was clearly an announced bump.
The consumer market makes it more difficult than ever for CPU manufacturers
The crisis that the PC market is going through is the consequence of a perfect storm. The increase in inflation has caused the purchasing power of consumers to suffer a lot, so it is clear that the economic circumstances are not helping. In addition, the drop in sales is to a certain extent caused by the alternation of cycles in which strong demand is usually relieved by a forceful setback. And, of course, we cannot ignore the price increase experienced by some PC components, such as graphics processors and other integrated circuits.
The professional segment could ease the outlook for Intel and AMD, but it is not at its best either
Lisa Su, the CEO of AMD, believes that during the first quarter of 2023 the consumer PC market has bottomed out, so it will start to get back on track going forward. Pat Gelsinger, the CEO of Intel, has also assured during the presentation of the latest financial reports of this company that this market is stabilizing. The professional segment could lighten the outlook for these two companies, but it is not at its best either because the demand for servers has also fallen significantly.
The heads of Intel and AMD foresee that during the second half of 2023 the sale of computers and servers will begin to recover ground, a perception that to some extent coincides with the prediction of IDC. Of course, this consultancy has anticipated that the recovery of this market will not be consolidated until the rebound effect occurs in 2024 in which Intel, NVIDIA or AMD, among other companies, seem to have pinned their hopes.
Processor manufacturers will have the arrival of the next generation of CPUs in their favor, but it is not clear that this spur will be enough to revitalize a market that is deeply affected. In the medium term, its future will inevitably be conditioned by the evolution of the global economy and its impact on the battered pocket of many consumers and companies. On the other hand, economic reality is no stranger to the extremely delicate political and geostrategic situation in which the great powers and industrialized countries are immersed. Business forecasts paint a hopeful future, but the uncertainty is too tangible to ignore.
Top image: Bich Tran
More information: Tom’s Hardware
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