Tech Industry

Intel ups server share, but AMD wins in PCs

Intel's Xeon carves server chip share despite Opteron price cuts, but AMD still gains in notebooks, desktops.

A correction was made to this story. Read below for details.

Intel continued to reclaim server chip market share from Advanced Micro Devices in the fourth quarter of 2006, but the smaller rival's strength with consumers helped it gain in desktops and notebooks.

Overall, AMD continued its gain in the x86 processor market, said Mercury Research analyst Dean McCarron. The Sunnyvale, Calif.-based company had 25.3 percent of chip shipments in the fourth quarter of 2006, an increase from 21.4 percent from the year-earlier quarter and the highest number in its history.

Intel, based nearby in Santa Clara, Calif., dropped from 76.0 percent to 74.4 percent over the same period, McCarron said.

AMD's gains didn't mean a financial windfall, though. The company's average server chip prices dropped, contributing to AMD's financially difficult quarter. According to AMD, the company's server chip share was 22.2 percent for the quarter, up from 16.4 percent a year earlier but down from 23.6 percent in the third quarter despite price cuts.

"Intel's gains in the server market are basically due to them having 'Woodcrest,'" said McCarron, referring to Intel's dual-core Xeon 5100 chip for dual-processor servers. Intel's "Clovertown" processor, which squeezes two Woodcrest chips into a quad-core package, "made a meaningful contribution to their business in the fourth quarter. Quad core is starting to happen fairly quickly," McCarron said.

AMD and Intel both showed gains in x86 processors for servers with four or more chips, McCarron said. That's particularly interesting, he said, because Intel's Xeon 7100 "Tulsa" chip uses the older NetBurst design, not the new, more energy-efficient Core design of Woodcrest.

"In the server environment, the world's moving more to multiprocessor systems, looking for beefier servers," McCarron said.

In 2006, AMD won over Dell, the last of the four major server sellers to use Opteron servers. But Intel also went four for four in January, announcing that a partnership with Sun Microsystems is joining Hewlett-Packard, IBM and Dell in offering Intel-based servers.

AMD fared better in desktops and notebooks than it did with its Opteron server chips. In desktops, fourth-quarter share increased from 24.4 percent to 29.1 percent, and in notebooks, fourth-quarter share increased from 15.1 percent to 19.4 percent.

Given that only a tiny fraction of the x86 chip market goes to other competitors such as Via Technologies or Transmeta, almost all of AMD's gains come at Intel's expense, or vice-versa.

"Their mobile business in particular has been growing very strongly in the last couple quarters, driven by them having more compelling products than in past--Turion 64--and working hard on getting (computer makers) to use them," McCarron said. HP has sold AMD-based PCs for years, and Dell followed suit in the second half of 2006.


Correction: This story misstated AMD's x86 chip market share for the fourth quarter of 2005. It was 21.4 percent.