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AMD continues to lose CPU market share to Intel

by Scott Bicheno on 29 April 2010, 12:12

Tags: Intel (NASDAQ:INTC), AMD (NYSE:AMD), IDC

Quick Link: HEXUS.net/qax3c

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Good news for nearly everyone

Market researcher IDC has released its figures for the Q1 global CPU market and they make good reading for the industry on the whole, with a 39 percent rise in shipments compared to the first quarter of 2009.

A look at the breakdown between the vendors reveals AMD is unlikely to be getting out the bubbly as it confirms that it has lost a fair bit of market share to Intel in that period.

In Q1 2009, AMD had 22.3 percent of the overall global PC CPU market, but a year later that has shrunk to 18.8 percent. While AMD has maintained a healthy 28 percent share of the desktop market, declines in both the mobile and server markets are what has led to the decline.

There was a decline in shipments from Q4 2009, but as Shane Rau, director of PC CPU research at IDC explained, that's to be expected. "PC processor shipments typically decline around 7 to 8 percent going from fourth quarter to first quarter. A decline of 5.6% is modest and wouldn't mean much by itself. However, after the huge rise in shipments we saw in the fourth quarter, it adds more credibility to market recovery and that the PC industry anticipates improvement in PC end demand in 2010."

 

 

 

 



HEXUS Forums :: 5 Comments

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The flip side is AMD lost less sales during the downturn in the economy, why? Because it only has two fabs, that are maxed completely out all the time, Intel on the other had has several fabs mostly running at less than 80% capacity. When demand fell Intel was already WELL below capacity due to their insane ability to produce huge numbers of chips. AMD's demand fell, but still pretty much remained above what they can produce.

But back in Q1, lets make up a figure, lets say 100million chips were shipped in Q1, now as the economy has picked up and sales have increased, 200million chips were sold in Q4. The market share is ONLY BACK TO WHERE IT WAS before the down turn, they haven't lost market share, infact they “may” have gained a little due to agressive pricing and the ability to sell a very good “platform”.

The fact is 23% of 100million is a massively less in terms of numbers sold, than 18% of 200million.

Intel actually shut down a couple of fabs IIRC and laid people off during the market crash, because demand was so much lower than their capacity, it made more sense to run 3 fabs flat out, then 5 fabs at 50% capacity. AMD has two fabs, at 98% capacity and that never stops.

AMD actually weathered the market crash better than most companies in the industry, largely due to the fact they have incredibly limited production for the demand.

Lets take some made up numbers again, lets say demand in the normal market for cheap AMD chips is 5million a month, but they can only make 3million a month. During the market crash, Demand crashed, but only to 2.8million, so they lost almost no real sales. THats why their market share went up.

Take Intel, demand is far higher than AMD, due to performance lets say demand in good times is 10million, however their capacity is 14million chips a month. During the market crash demand crashed to 7million chips, Intel was selling less chips, with less demand and a whole bunch of people working in fabs that weren't producing that much.

Of course, in any other circumstance not being able to fill demand is a bad thing.

Even dropping from a market share of 23 to 18%, with a 39% overall increase in processors sold, that still means AMD sales were up, what, 30%(too tired to do the proper maths there).
Not wanting to get into an argument or anything, I think I understand the point you're getting at, but how can you say that “they havn't lost market share” when they used to have a 23% share of the market, but now have an 18 % share of the market.

Also, I really hope that demand for AMD CPUs isn't above what they can supply, as if so that's a really poor way to run a business and doesn't bold well for AMD in the long term.

I guess the reason they've lost market share is everyone buys intel based netbooks (a huge area for revenue volume) and intel make the fastest server cpus (massive margins). It's all well and good that AMD have made great gains in the mainstream desktop CPU sector, but if, in comparison to the other sectors, no bugger buys desktops anymore, what's the point? I'm a fan of AMD (being a proper brit I generally support the under dog), and I want them to claw their way back to having at least equal footing with intel from a technical view point, but the numbers from the article paint a somewhat bleak picture for the short to medium term.
llololloy
Also, I really hope that demand for AMD CPUs isn't above what they can supply, as if so that's a really poor way to run a business and doesn't bold well for AMD in the long term.

Fabs are very expensive to build and maintain and the R&D for developing new processes is probably very expensive too. You are talking billions of dollars.

Now look at the size of AMD when compared to Intel.

Another factor is that AMD were constrained for years as they had to build their own fabs. This is because of the agreements they had with Intel so they could produce x86 processors legally.

Part of the Intel settlement last year was not only the 1.25 billion dollars they received from Intel but also the fact they do not need to maintain their own fabs any more. Hence they are free in theory to use any company they want and do not need to own their own fabs any more.

Also the actual number of processors shipped or sold would be a better indication of whether AMD is doing better or worse.

Percentages don't tell you if the entire market has gotten much smaller or much bigger.
CAT-THE-FIFTH
Percentages don't tell you if the entire market has gotten much smaller or much bigger.

What if the percentage refers to the entire market, as in my first paragraph?
Scott B;1915789
What if the percentage refers to the entire market, as in my first paragraph?

How many processors were actually shipped for the entire market during each quarter??