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AMD gains market share, but so does Intel

Processor makers' gains seem to be chipping away mainly at the shares of their smaller competitors.

In the PC processor market in the fourth quarter, everyone was a winner--except the really small companies.

Intel saw its market share inch up to 82.2 percent in the fourth quarter, up from 82 percent in the previous quarter, according to data from Mercury Research. Meanwhile, the market share for rival Advanced Micro Devices climbed to 16.6 percent, up from 16 percent.

Both companies gained because smaller manufacturers Via Technologies and Transmeta, which together account for less than 2 percent of the market, shrunk. Transmeta recently stated that it needed to find a partner to continue to stay in the chipmaking business.

Nonetheless, AMD continued to chisel small gains at the expense of Intel. At 16.6 percent, the company has its largest quarterly market share in the past eight quarters, according to Mercury's Dean McCarron. In the fourth quarter of last year, Intel had an 83.7 percent market share, compared with AMD's 14.7 percent share.

"There is some tangible growth there," he said. However, he added, the fourth quarter of last year was particularly difficult for AMD, so gauging the growth rate by making an annual comparison of 1.9 percentage points is slightly misleading.

The downside for AMD is that a good portion of its growth in the fourth quarter came through its budget Sempron chips, which brought in less profit than its more expensive Athlon chips. AMD also experienced growth in server chips. Strong points for Intel were server chips and notebook chips.

Mercury studies the shipment of so-called x86 processors. The survey does not include IBM Power chips used in Apple Computer's Macs or the RISC chips used in servers.