Skip to main content

CPUs and Memory Sales Drop Dramatically As PC Market Slows

SK hynix NAND chips
(Image credit: SK hynix)

According to AMD, Intel, and the South Korean trade ministry, sales of processors and memory for client PCs are dropping faster and more significantly than expected. Media reports say that shipments of memory were down nearly 25 percent last month because of softening demand in Europe and the U.S., as well as lockdowns in China.

Just a little less than a month ago, IDC said that shipments of PCs will drop to 305.3 million units in 2022, down 12.8% from 348.8 million units in 2021. The revised PC shipments forecast for 2022 was primarily based on reports from PC makers and sales forecasts of companies like AMD and Intel. But the situation got worse than expected pretty quickly. 

Earlier this year, Intel expected sales of PCs to drop around 10% year-over-year and start to rebound already in the second half of 2022. AMD was a little more pessimistic and forecasted the PC market to be down 'midteens percent' in 2022 compared to the previous year. But executives from both companies told Stacy Rasgon, an analyst with Bernstein, that the market was trending worse than expected, reports Barrons

CPU sales are an important indicator of PC market health. The earnings of memory suppliers are another good indicator of what to expect from the PC market. Shipments of DRAM fell 24.7% in August compared to the same month a year ago because of lower demand for PCs in Europe and the U.S. and COVID lockdowns in China. By contrast, sales of South Korean DRAM in July dropped 7% YoY, reports DigiTimes citing data from Bloomberg and the South Korean trade ministry.  

This is bad news for South Korea as the country's tech exports account for one-third of the country's exports. DRAM accounts for about half of Korean memory chip sales, and 3D NAND accounts for another half. In general, South Korean tech export dropped 4.6% year-over-year in August. 

South Korea-based Samsung and SK Hynix control about two-thirds of the global 3D NAND and DRAM memory markets, so if they have problems selling their chips, it is a clear indicator that demand is dropping. What remains to be seen is whether the two companies will lower their 3D NAND and DRAM pricing or reduce output to keep prices at comfortable levels.  

Memory price reductions could be good for the ongoing transitions to DDR5 memory and for costs of SSDs featuring a PCIe 4.0 x4 and PCIe 5.0 x4 interfaces. But this will affect the abilities of companies like Samsung, SK Hynix, and Micron to invest in future products and process technology transitions, which is not particularly good for the long-term. 

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • Giroro
    Nvidia's $1600 GPU is so exciting, I'm going to build an entirely new PC!
    Sorry, I just wanted to be the first and only person on Earth to say that.
    Reply
  • A Stoner
    Giroro said:
    Nvidia's $1600 GPU is so exciting, I'm going to build an entirely new PC!
    Sorry, I just wanted to be the first and only person on Earth to say that.
    Actually, I am excited to build a new PC, and am seriously looking at the new $1600 GPU. But I will wait until I see what AMD brings to the table before making my final decision.
    Reply
  • waltc3
    That's what usually happens right before the major OEMs announce newer GPUs and CPUs. Not unusual at all, imo.
    Reply
  • Giroro
    A Stoner said:
    Actually, I am excited to build a new PC, and am seriously looking at the new $1600 GPU. But I will wait until I see what AMD brings to the table before making my final decision.
    Are you building the PC because of the new GPU? Or did you decide to build a PC first and just want to consider all options?
    Reply
  • Tom Sunday
    A Stoner said:
    Actually, I am excited to build a new PC, and am seriously looking at the new $1600 GPU. But I will wait until I see what AMD brings to the table before making my final decision.

    Greetings from the man on the street in Stehekin, WA! Indeed as I continue browsing the tech-channels I keep on dreaming about the hardware and which in reality I cannot afford. Times and money on my level of the food-chain are simply against me. I as well would love the idea in building a new system. The new Ryzen 7000 series has great appeal. But going with AMD I will also need a new MB and DDR5 memory and perhaps even a more powerful PSU. Then my AIO in turn is going on over 3-years and the pump is becoming noisy! I guess today like the ‘everyday man’ I need to wait a bit longer before considering the purchasing of any non-essential items. This is probably also the case with the fledging PC market as many simply do not have the extra cash laying around? Hoping for better times ahead and less headwinds!
    Reply
  • IceQueen0607
    lol. They probably shoudn't have jacked up the prices :)
    12900K CPUs are as high as A$1300, but averaging around A$1000.
    I miss the days of keeping my PCs fairly current :(
    Reply
  • korekan
    i also missed the day that should i pick i7 or powerfull i5.
    nowadays , even the cheapest i5 still made me to reconsider, should i buy the new one or the older gen?
    that goes with other part as well...

    not everyone got income increased fairly.
    the proportion between income and price of living not "balanced" anymore.
    Reply