CPUs See Biggest Shipment Decline in 30 Years

In another sign that the PC pandemic boom is over, CPU shipments took a historic dive during last year’s fourth quarter, according to Mercury Research.

In Q4, x86 CPU shipments from vendors including Intel and AMD suffered their biggest year-over-year and quarter-over-quarter decline in Mercury Research’s 30 years of tracking the market. 

The year-over-year decline amounted to 34% while the quarter-on-quarter drop came in at 19%, Dean McCarron, president of Mercury Research, told PCMag on Thursday. 

Low demand for PCs and excess inventory at retailers and vendors depressed the CPU shipment numbers, two years after the market saw soaring growth on laptop sales and surging purchases for PC graphics cards. Instead, 2022 witnessed demand shrink back to more normal levels amid persistent inflation and the ongoing economic downturn. 

“For the year, 2022 unit shipments were 374 million (excluding ARM processors) and revenues were $65 billion, down 21 and 19%, respectively,” Mercury Research added. “While this appears very gloomy, note that overall processor market revenue was still higher in 2022 than any year ever with the exception of 2020 and 2021.”

The excess product inventory is also causing both Intel and AMD to under-ship CPU units as both companies admitted in recent earnings(Opens in a new window) calls(Opens in a new window). “Additionally PC demand for processors is lower, and weakening macroeconomic concerns is driving PC OEMs (original equipment manufacturers) to reduce their inventory as well,” Mercury Research said. 

In Q4, shipments for laptops suffered their largest year-over-year decline ever recorded. Meanwhile, shipments for desktop CPUs also fell significantly. Due to Intel’s decision last year to raise prices on the company’s chips, McCarron said: “PC manufacturers bought some of what would have been Q4 purchases in Q3 (e.g. pulled them in a quarter) to get the processors cheaper before the increase.”

Intel has already warned investors this year’s Q1 will also be a rough quarter for the chip maker. However, AMD CEO Lisa Su said in an earnings call it’s seeing some signs for growth in this year’s second half.