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Credit: John Burek

(Photo: John Burek)If you’re an executive at Intel or AMD and in charge of sales forecasts, you likely projected some big numbers for the end of 2022. Both companies had unveiled their new platforms, promising next-gen performance and features. Since many people could not upgrade their PCs during the pandemic, all the ingredients of a booming holiday sales period were present. Added to the mixture were all-new, high-powered GPUs as well. Overall, it seemed like the perfect time to build or buy a new PC. Oddly, that did not come to pass. Instead, Q4 ended up being the worst period for CPU sales in 30 years, according to Mercury Research.

The market analysis company’s president, Dean McCarron, discussed the somber news with our colleagues at PCMag this week. CPU sales declined year-over-year by 34% and quarter-over-quarter by 19%. Those are the biggest declines for both metrics Mercury has ever tabulated in its 30 years of existence.

The reasons for the decline include excess inventory and low demand for CPUs. Intangible factors may also be at play, such as global economic uncertainty. The numbers mirror those from IDC, which also posted a gloomy Q4 report recently for PC shipments. IDC’s numbers from 90 countries showed a 28.1% decline year-over-year. That drop-off was twice as high as in Q3, making Q4 a particularly bloody quarter for the PC industry.

In response to the turbulence, Intel and AMD are now under-shipping CPUs. Both companies’ CEOs admitted to this in their recent earnings calls. AMD’s CEO said it would do less of it in Q1, though. Intel CEO Pat Gelsinger said his company’s “Q4 under shipping [was] meaningfully higher than full year.” Despite this strategy, CPU shipments for both laptops and desktops suffered dramatic declines in what is normally a robust quarter. Intel also suffered from its decision to announce price increases in Q3. That caused some of its partners to buy stock before the price went up in Q4.

Despite the dour report, it’s not all bad for the PC market. In 2022 overall, CPU shipments and revenue were down 21 and 19%, respectively, from previous years. However, that was the pandemic era, a magical time of record profits for all semiconductor companies. Despite the decline, the numbers in 2022 were still better than the pre-pandemic years. Although the red ink is projected to continue to flow for another quarter or two, a turnaround is expected later this year.

One unexpected result from this volatility is it’s allowed AMD to claw market share away from Intel. According to IDC’s report via HotHardware, AMD now has over 30% of the x86 market. While Intel still has more than twice that market share, it lost 5.6% over the past year.

Now Read:

• Nvidia Announces Record $7.1 Billion Q3 Revenue
• IDC: Global PC Shipments Declined 15 Percent in The Second Quarter
• Semiconductor Industry Forecast Projects Huge Gains for AMD, Losses for Intel and Sony