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Barclays Capital ups PC processors sales forecast

Posted: 19 Feb 2010 ?? ?Print Version ?Bookmark and Share

Keywords:PC market? processor? server?

Growth in unit sales of PC processors and PC servers will be stronger than expected this year, according to a Feb. 17 report by Wall Street Analyst firm Barclays Capital. However, the firm forecasts declines in the average selling prices (ASPs) of the chips for the next two years.

Although Advanced Micro Devices made modest market share gains in unit sales in a strong Q4 09, it did not gain ground on archrival Intel Corp in revenue. Barclays did not change its ratings for AMD, Intel or Nvidia, but was most bullish on the outlook for Intel.

The firm expects PC processor sales to grow 15 percent in 2009 to 390 million units, up a percentage point from its prior forecast of 385 million units. Sales will grow 14 percent in 2011 to 443 million units, it estimated.

Barclays also issued an updated report of PC server sales forecasting unit growth at 12 percent in 2010 versus eight percent in its previous forecast. It estimated unit growth in notebook sales for 2010 at 27 percent with desktops about flat at three percent growth.

The firm cited strong Q4 sales, an expected uptick in businesses buying new computers and an overall economic recovery as reasons for its improved forecasts. PC processors sales rose 6.2 percent in 2009 to 339 million units, it reported.

The ASP of a PC processor was up six percent or about $5 in the last quarter to $89, mainly due to improvements in the price of server chips. However Barclays predicted ASPs will decline three percent to $85 in 2010 and fall another five percent in 2011 to $80.

AMD gains about a half a percentage point in market share during the last quarter of 2009 in which total PC processor sales rose 9.1 percent over the previous quarter to about 100 million units. However, AMD's share of processor revenues remained largely unchanged as its ASPs rose just 1.9 percent compared to a 6.5 percent ASP increase for Intel.

Despite the share increases and an expected to return to profitability, Barclays did not upgrade AMD's stock. "Long term, we recognize competitive pressures may remain intense with some pressure in the higher end of the server market given the momentum of Intel's Nehalem in 2010," the report said.

The Barclays report took an even harsher tone with Nvidia. "Long term reservations remain given the decline of the chipset business and fierce competition in its core GPU market with still limited visibility [on new processors such as Nvidia's] Tegra in 2011," the report said.

By contrast, the firm was relatively bullish on Intel. "We remain impressed with Intel's strong product roadmap with the introduction of new Westmere [32nm] products and [its] competitive positioning may provide incremental sales growth," it said.

- EE Times





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