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November 4, 2009

Intel expands chip lead over AMD

AMD's reliance on desktop market to blame

Agam Shah

Intel expanded its chip shipment lead over Advanced Micro Devices during the third quarter as the rivals battle for larger market share, according to a survey released by Mercury Research.

Intel shipped 81.5 percent of PC microprocessors in the third quarter, a gain from 81.2 percent of CPUs shipped in the third quarter last year. AMD shipped about 17.8 percent of microprocessors during the third quarter, a gain from 17.7 percent last year.

However, AMD's market share fell compared to the second quarter, when it held an 18.5 percent market share, compared to an 80.5 percent share for Intel.

The third-quarter gains for Intel and AMD came at the expense of Via Technologies, which saw its market share drop to 0.7 percent, compared to 1.1 percent last year.

A total of between 90 million and 100 million PC processors shipped, which set a new record for the third quarter, said Dean McCarron, principal analyst at Mercury Research. The total number of processor shipments was up by less than one percent compared to last year's third quarter, when the previous record was set.

There was a big demand for laptop chips from PC makers as laptop and netbook shipments gained ground, McCarron said. Shipments for mobile CPUs - including laptop and netbook chips - grew by more than 22 percent compared to last year. Comparatively, desktop and server chip shipments were down year-over-year.

Intel's gains in the processor market are symptomatic of the types of products being offered by the chip makers, McCarron said. Intel has a larger mix of mobile products, while AMD is "heavily desktop", McCarron said.

Intel plans to move production of laptop and desktop chips from the 45-nanometre manufacturing process to the 32-nm process during the fourth quarter this year. That could result in smaller and more power-efficient circuitry to make PCs faster. Similarly, AMD is shifting its products from the 65-nm process to the 45-nm process.

Intel has always had a manufacturing advantage over AMD, and it is unlikely the move will give Intel a major boost in market share, McCarron said. AMD is progressing at a fast clip that helps it maintain market share, and the rivals can keep each other honest by offering products with price and performance advantages.

"Right now it looks like they are running parallel," he said.