Price War Makes Intel, AMD Chip Industry's Biggest Losers - InformationWeek

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7/31/2006
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Price War Makes Intel, AMD Chip Industry's Biggest Losers

While most chip suppliers grew revenue in the second quarter, the fierce competitors saw declines.

The ongoing price war between Intel and Advanced Micro Devices has resulted in the two companies posting the worst quarterly revenue declines of the 15 largest semiconductor suppliers worldwide, says a new report by IC Insights.

Intel saw its semiconductor sales decline 10% in the second quarter of 2006 compared to the first quarter, and AMD's sales declined 9%. But IC Insights expects full-year sales at Intel to remain down at least 10%, while AMD is on a pace for a 42% increase.

Despite the drop in revenue in the quarter, Intel remains firmly in control of the top spot of all semiconductor suppliers in world, with $7.2 billion in second-quarter sales and $15.3 billion in the first half. The closet competitor is Samsung with $4.9 billion in sales in the second quarter and $8.9 billion in the first half of the year.

AMD grew its ranking from 16th in the first half of 2005 to 14th worldwide in the first half of 2006. AMD posted semiconductor sales of $1.2 billion in the second quarter, and $2.5 billion in the first half of the year.

Other leading semiconductor providers in the second quarter were Texas Instruments with $3.5 billion in sales, foundry Taiwan Semiconductor Manufacturing Co. with $2.5 billion, and Infineon with $2.5 billion.

The only other top 15 semiconductor supplier with decreased revenue in the second quarter was Toshiba, which with $2.2 billion saw its sales drop 7% compared with the first quarter.

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