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Intel's Share Of Chip Market Rises, AMD's Falls

While Atom certainly contributed to Intel's success, other brands and products in the desktop, notebook, and server segments added to its power.
Intel's share of the global microprocessor market increased every quarter of 2008, while rival Advanced Micro Devices saw its share fall, a market researcher said Wednesday.

Intel's success was partly thanks to its Atom processor, which became a favorite of mini-laptop manufacturers, iSuppli said. The popular devices, also called netbooks, have screen sizes 10 inches or less and cost less than $500, with many models costing as little as $300.

In the fourth quarter of last year, Intel accounted for 81.8% of worldwide processor revenue, up 0.88% from its 80.96% share in the third quarter, iSuppli said. Year to year, Intel's share rose 3.4 percentage points from 78.4% in the fourth quarter of 2007.

"Intel grew its share of the microprocessor market in every quarter of 2008 on a sequential basis, effectively using each quarter as a building block for the next," iSuppli analyst Matthew Wilkins said in a statement. "During this time, Intel’s low-priced Atom has become increasingly popular as the netbook market has gained steam."

Netbook sales last year soared more than 2,000% from 2007, which marked their introduction. This year, sales of the mini-laptops are expected to increase 68.5%, according iSuppli, while the rest of the PC market is expected to see declines as a result of the economic recession.

But while Atom certainly contributed to Intel's success, the strength of Intel other brands and products in the desktop, notebook, and server segments were major contributors, iSuppli said. Intel's strength translated into weakness for AMD, which lost share year to year and on a sequential basis in the fourth quarter of last year.

AMD accounted for 10.6% of global chip revenue in the fourth quarter, a decrease of 3.5% from the 14.1% it held in the same period of 2007. AMD gained share in the third quarter of 2008, but that boost disappeared in the fourth quarter, as the company lost 1.6 percentage points of share.

AMD this year is in a better position to improve market share, iSuppli said. Among the strategic initiatives that may take hold this year is the company's decision to spin off its manufacturing operations into a separate company, which will free up needed cash for research and development and marketing. In addition, the company has started shipping processors made with a new 45-nanometer manufacturing process that boosts performance and energy efficiency.

For the third consecutive year in 2008, the collective market share of Intel and AMD increased. The combined share rose to 92.5%. "Clearly things are getting tougher if you’re a microprocessor supplier and your name is not Intel or AMD," Wilkins said.

ISuppli includes RISC, x86, and other types of general-purpose microprocessors in determining market-share data. Intel and AMD are primarily x86 manufacturers.

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