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Intel increases lead in PC chip market
 

SAN FRANCISCO (MarketWatch) -- Intel Corp. widened its lead over archrival Advanced Micro Devices Inc., as the worldwide personal computer chip-maker posted an 8.5% sequential fourth-quarter growth, according to the International Data Corp.

Intel was still the No. 1 PC chip maker, with 76.68% share of total shipments in the fourth quarter, up from 74.55% in the year-ago period, according to IDC. AMD was still No. 2 with 23.09%, compared to 25.32% in the same quarter the previous year.

Intel also remained dominant in the three major PC chip markets -- desktops, notebooks and servers -- IDC said.

PC chip shipments totaled about 280 million units in 2007, up 12.6% from 2006, according to analyst Shane Rau of IDC. Total revenues rose 1.7% to $30.55 billion in the same period.

The disparity in unit and revenue growth "indicates the degree of price erosion that occurred early in the year," IDC said. The chip industry has been reeling from a glut in memory chips that has led to aggressive pricing.

With growing concerns about the state of the U.S. economy and its potential impact overseas, IDC also offered a muted forecast for chip sales in the current quarter.

"While processor shipments typically decline about 6% to 7% between the fourth quarter and the first quarter, economic concerns in the U.S. and the effects on corporate and consumer systems purchases could mean a stronger sequential decline in 1Q08," Rau said in a written statement. "However, the weakness in the U.S. dollar effectively means a price discount for overseas markets that are driving PC unit demand, so this could have a mitigating effect."

Another bright spot is the mobile chip market, which IDC said will likely continue with double-digit growth and is expected to surpass the desktop chip processor market in 2009.

 
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