AMD Steals Market Share From Intel

Intel maintains stranglehold on microprocessor market, but rival is gaining.

Advanced Micro Devices, which has struggled for profitability against Intel, managed to snatch a bit of market share in terms of shipments from its larger rival in the fourth quarter of last year.

Researcher iSuppli said Wednesday that AMD gained 1.6 percent year over year for a 12.1 percent share of the microprocessor market in the quarter. Intel lost 1 percent over the same period, for an 80.6% share.

Smaller microprocessor suppliers collectively accounted for 7.3% of shipments in the quarter, down 0.6 of a percent from a year ago.

AMD's gain in the quarter came at the expense of Intel and the smaller players, iSuppli said.

For the full year, the numbers were more balanced. AMD ended 2009 with a 12.1% share, up 0.2 percent from 2008. Intel ended the year with an 80.3% share, an increase of 0.3 of a percent from a year ago.

"This is an interesting development because PC average selling prices dropped significantly during the course of 2009 -- especially for notebooks," iSuppli analyst Matthew Wilkins said in a research note Wednesday.

"The fact that AMD and Intel virtually maintained their market share at the annual level shows that neither supplier was overly punished by the dropping ASPs [average selling prices]. It also indicates that neither was able to capitalize on the situation very effectively," said Wilkins.

While the latest numbers do not mean AMD will continue to grow at Intel's expense, it is a positive sign for the company, which continues to slug it out with Intel in the PC and server markets.

Both companies this week released new lines of server processors in hopes of capturing the attention of businesses, which are expected to start replacing older computers this year after delaying purchases during last year's economic recession and the wait for Windows 7.

AMD in January reported a 42% increase in revenue to $1.65 billion in the fourth quarter, driven by higher sales of its microprocessors and graphics cards. While the company reported a loss of 5 cents a share, AMD's results easily beat Wall Street estimates of a loss of 18 cents a share on revenue of $1.49 billion.