The PC industry and technology sector as a whole is facing a challenging time, which is not a secret. However, a report by Dean McCarron of Mercury Research gives us a little insight into what is going on. One of the biggest revelations is the data showing that the x86 processor market experienced “the largest quarter-over-quarter and year-over-year declines in 30 years of record-keeping.” According to previous third-party data, McCarron is confident that the fourth quarter of 2022 and full-year figures depict the worst decline in the history of PC processors. Which is the biggest decline in the last 30 years since the beginning of record keeping.

The downturn in the x86 processor market was caused by a double whammy of decreased demand and an adjustment in inventory. This harmful combination led to 2022 unit shipments of 374 million processors (excluding ARM), a 21% decrease compared to the previous year. Revenues amounted to $65 billion, a 19% decrease year-over-year. Despite the bleak outlook, McCarron offers a glimmer of hope by reminding us that overall processor revenue in 2022 was still higher than any year before the start of the 2020s. 2020 and 2021 had a huge increase in demand for processors. Thanks to covid and everyone moving to working from home or spending time gaming and not going out on the weekends.

AMD is a glimmer of hope

It’s not all doom and gloom, In Q4 2022, AMD’s gains in the server CPU market stood out as one of the few segments that experienced growth. Additionally, the company was able to increase its market share in the declining desktop and laptop markets. Mercury has provided some charts that analyze the overall x86 CPU market share, broken down by segment. A notable trend is AMD’s significant growth in market share, rising from approximately 23% of the x86 market in 2021 to almost 30% in 2022.

According to an analyst at Mercury Research, the decline in shipments can be attributed to excess inventory being shipped in previous quarters, affecting current sales. The analyst referred to it as a “perfect storm.” as CPU suppliers are limiting shipments to help reduce inventory levels. While PC demand for processors is also lower and macroeconomic uncertainties are causing PC manufacturers to reduce their inventory.

The trend is expected to persist through the first half of 2023, and financial results from major players in the industry in the coming months are expected to provide further evidence of this inventory situation.

Despite this, some big tech firms and analysts are optimistic about the future of the PC market. Predicting a turning point in the second half of 2023. This sentiment is echoed by Mercury’s report, and it is hoped that the advancements in CPU, GPU, and related technology will drive growth in the PC market.

By drewsly

For as long as I can remember, I had always had an interest in computers and games. It all started with the SNES and moving on to the Playstation 1. Eventually this passion evolved into PC gaming. With playing my first competitive game being Battlefield 2142 and then moving into COD4 Promod. I have always been a keen PC builder and enthusiast but couldn’t afford to go after this passion until later in life.

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