iSuppli Fast Facts on Intel’s Third-Quarter Results 

To assist media coverage of Intel Corp.’s third-quarter financial results, iSuppli Corp. is releasing the following fast facts:

• Intel in the third quarter benefitted from a rise in PC sales compared to the second quarter. iSuppli’s preliminary estimate of global PC shipments—consisting of desktops, notebooks and entry-level servers—amounted to 73.8 million units in the third quarter, up 9.8 percent from 67.2 million in the second quarter. Despite this sequential rise, third-quarter shipments are estimated to have declined by 6.7 percent from 79.1 million in the third quarter of 2008.
• Intel also capitalized on the continued rise in demand for netbook PCs. The company dominates the netbook microprocessor market with its Atom chip. iSuppli predicts global netbook shipments will rise to 22.2 million units in 2009, up 68.5 percent from 13.2 million in 2008.
• While Atom represents only a small share of Intel’s total revenue, its profitability is disproportionately high. “Netbook microprocessors are a high-margin product because they utlilize old technology,” said Matthew Wilkins, principal analyst, compute platforms, for iSuppli. “The Atom is based on the old Pentium M microprocessor and uses a mature manufacturing process. Because of this, Intel is getting very high yields and an extremely high margin on the Atom.”
• Like much of the semiconductor market, Intel in the third quarter benefitted from low semiconductor inventories throughout the electronics supply chain. Stockpiles of all types of semiconductors held by PC makers, including microprocessors, declined to 14.1 Days of Inventory (DOI) in the third quarter, iSuppli estimates, down 9.8 percent from 16.9 days in the second quarter. With inventory levels so low, end demand for PCs translated directly into sales of microprocessors for Intel.
• iSuppli projected that global sales for all types of microprocessors, including the X86 chips sold by Intel, rose to $58.3 billion in the third quarter, up 10.6 percent from $52.8 billion in the second quarter.
• Although market conditions have improved dramatically since the first quarter of 2009, weak sales at the start of the year mean that annual PC shipments still are set to decline in the 4 percent range.
• Intel dominates the global microprocessor business. In the second quarter of 2009, the company accounted for 80.6 percent of global microprocessor revenue, up 1.4 points from 79.1 percent during the same period in 2008, and a 1.5 point rise from the first quarter of 2009. This gave Intel the largest share of global microprocessor revenue since it claimed 82.4 percent of revenue in the third quarter of 2005. The total includes all types of microprocessors, not just the X86 type sold by Intel.