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AMD inches up in Windows PC market

The chipmaker sees its share of the market for chips for Windows PCs increase by a percentage point. But Mercury Research says AMD's share of the overall market for x86 processors fell.

Advanced Micro Devices made a small gain in market share of chips for Windows PCs during 2002, according to a report by research firm Gartner. But another report says the chipmaker's share of the overall market for x86 processors fell.

Sunnyvale, Calif.-based AMD, citing the Gartner report, said it gained a point of market share of worldwide sales of chips for Windows desktop and notebooks, bringing its chunk of the market to 19 percent, from 2001's 18 percent. The rise came during a tough year for the company.

AMD grappled with excess inventories of its Athlon XP processors, which slowed sales of new chips. The company also launched a new cost-cutting plan as part of an effort to get back to profitability after a string of quarterly losses.

Though its overall worldwide gain in Windows PCs was small, AMD saw more significant increases in some geographical areas, according to the new Gartner figures.

For example, AMD increased sales of chips for Windows desktops and notebooks in the Asia-Pacific region, taking them from 11 percent in 2001 to 15 percent last year. The Asia-Pacific region includes countries like China, where computer sales are growing quickly. It excludes Japan, however.

Though the Gartner report shows progress for AMD in the Windows arena, it does not represent the entire market for x86 processors, which are also used in PCs running other operating systems and in consumer-electronics devices. x86 chips include AMD's Athlon, Intel's Pentium and chips from VIA Technologies and Transmeta.

The broader market for x86 chips is responsible for a good many more processor unit sales. Servers, computers running the Linux OS and even game systems, such as Microsoft's Xbox--based on an Intel chip--play a part in adding to the overall figures.

When looking at the x86 processor market as a whole, AMD had 14.8 percent of the market in 2002, versus a share of 20.2 percent in 2001, according to Mercury Research.

"Part of what happened in 2002 was AMD's customers burned off a lot of inventory," said Mercury's Dean McCarron. "That means that the number of systems that were built exceeded the number of processors AMD sold. That's because the manufacturers had already purchased some of those processors previous to 2002."

Inventories of AMD processors were built up at the end of 2001 and early in 2002, McCarron said, because of low prices and optimism for a market recovery by PC makers.