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Intel, AMD comfy during fourth quarter

Both chipmakers have good things to say: Intel saw its market share inch up, while AMD raised the average selling price of chips over the past two quarters, leading to its first quarterly profit in two-and-a-half years.

In regard to fourth-quarter numbers, both Intel and Advanced Micro Devices can declare victories.

Intel saw its share of the computer chip market grow to 82.8 percent, a slight increase over its 82.6 percent share in the second quarter, said Dean McCarron, principal analyst at Mercury Research.

AMD, meanwhile, saw its share dip to 15.5 percent, 0.2 percent off its third-quarter share, but the company managed to raise the average selling price (ASP) of its chips in the past two quarters, a factor that helped it report its first quarterly profit in two-and-a-half years.

"Everyone has something good to say," McCarron said. "I wouldn't read too much into the change in share. For AMD, the two-tenths (of a) point decline in market share is less important than the increase in revenue."

Maintaining prices has historically been tough for AMD. If not for the increase in ASPs last year, the company likely would have faced a situation in which its cumulative losses would have been greater than profits. Instead, AMD has reported a cumulative net profit of $198.6 million since 1969.

For 2003 as a whole, Intel's market share came to 82.9 percent, down 0.7 percent from its market share of 83.6 percent in 2002. AMD's market share rose 0.5 percent to 15.4 percent. Still, Intel is close to the high end of its historical market share, McCarron said.

Overall, that's about as stable as it gets, McCarron said. In 2001, AMD grabbed close to 5 percent of market share from Intel, and Intel grabbed it back in 2002. Intel also gained close to 5 percent in 1998. The years 1999 and 2000 were like 2003: lots of noise, but little movement of the market share needle.

Mercury's market share figures do not include PowerPC chips made by IBM and used in machines from Apple Computer. The figures also do not include processors that Intel ships to Microsoft for the Xbox game console. With Xbox, Intel's share would rise. The remaining few percentage points in the Mercury statistics come from sales of Via and Transmeta chips.