AMD ekes slight gain against Intel
Chipmaker Advanced Micro Devices gains a pinch of market share year over year against its rival in a market that seems to be improving.
Sunnyvale, Calif.-based AMD saw its market share in the second quarter of 2003 inch up to 15.7 percent, a tenth-of-a-point increase from the same period a year ago, according to statistics compiled by Mercury Research.
Intel, meanwhile, saw its market share slip to 82.5 percent in the second quarter, from 82.8 percent in the same period the year before. Other manufacturers, a grouping that includes Transmeta, increased their collective market share from 1.7 percent to 1.8 percent.
The big news for the quarter, however, is that the processor market appears to be on the rebound.
Microprocessor shipments were actually slightly below the norm in the second quarter. (PC shipments rose in the quarter, but sometimes the two markets aren't synchronized because of inventory overhang and shipment schedules). On the positive side, a record number of portable components were shipped--notebook chips sell for more than their desktop counterparts and are generally more profitable--and overall shipments are on the rise.
"There's a lot of evidence that the third and fourth quarters are both going to be growth quarters as they normally are, seasonally, and pretty good growth quarters at that," said Dean McCarron, principal analyst at Mercury.
"Mobile was the bright spot in a not-so-bright quarter," McCarron added. "It's not necessarily a slam dunk, but someone who's looking for a system for basic utility--a lot of them are choosing the notebook versus a desktop."
Although AMD made slight gains in the quarter, it is a slim laurel for the company to rest on. For one thing, the second quarter of 2002 was a terrible time for AMD. The company was in the midst of a price war with Intel and trying to burn off excess inventory. Intel gained six points of market share over the same period in 2001. As a result, AMD had an easy benchmark to beat this quarter.
AMD also didn't fare well sequentially. The company's market share fell nine-tenths of a percentage point from the first quarter, dropping from 16.6 percent to 15.7 percent. By contrast, Intel saw its market share increase from 81.7 percent in the first quarter to 82.5 percent.
"If you look at what has happened with AMD over the last couple of quarters, it was clear in (the first quarter) that it did good business in China and that that business probably wasn't sustainable. They may have lost a little bit of that," McCarron said. "But typically you have a seasonal decline in (the second quarter) and neither vendor really departed that decline."
The competition between the two companies will shift into high gear over the remainder of the year. In late September, AMD will release the Athlon64, a new desktop chip that can run 32-bit and 64-bit software.
Intel will then follow with Prescott, the successor to the Pentium 4. The chip will feature new instructions for better multimedia processing and a large cache for additional performance.
Mercury's numbers include so-called x86 processors shipped for inclusion in desktops, notebooks, servers and Xboxes. Microsoft incorporates Intel processors into its Xbox gaming console.