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Microprocessors Post Strong Third-Quarter Revenue Growth

Despite overall weak economic growth, worldwide PC microprocessor revenue increased 16.1 percent to $10.7 billion in the third quarter compared to the third quarter of 2010. Revenue also rose 12.1 percent in the third quarter compared to the second quarter of this year, according to researcher International Data Corp (IDC).

Overall processor revenue increased, due in part to an increase in microprocessor average prices. The average price that OEMs pay for PC microprocessors rose more than 5 percent in the third quarter, said Shane Rau, director of semiconductors: personal computing for IDC, headquartered in Framingham, Mass. It was the eighth quarter in a row that prices increased.

Rau added that Intel's Sandy Bridge and AMD's Fusion microprocessors with integrated graphic processors are driving the increases in average prices. Those processors have higher price tags than many other processors and demand for them is growing. At the same time, demand for lower cost, low-end processors, such as Intel's Atom processors, are declining.

On a unit basis, the PC microprocessor market rose 6.7 percent compared to second quarter and 5.2 percent compared to third quarter of last year.

Intel increased its market share in the third quarter to 80.2 percent, up 0.9 percent compared to the second quarter. Meanwhile, AMD’s share dropped 0.7 percent to 19.7 percent.

Since June, client PC processor (desktop, mobile computers and x86 servers) demand growth has slowed down slightly. Combined with a weak macroeconomic outlook due to debt issues in Europe and poor job growth in the United States, IDC reduced its client PC processor unit growth forecast for 2011 from 9.3 percent to 7.3 percent.