AMD picks away at Intel's lead in Q1

It's no surprise that Intel still dominates the chip market, but AMD gained some ground in the first quarter.

Advanced Micro Devices' (AMD's) considerable market share expansion during the first quarter only underscores how far it has to go to erase Intel's dominance, according to data released by Mercury Research this week.

Intel shipped 81.7 percent of all desktop, notebook and server processors based on the x86 instruction set in the first quarter, said Dean McCarron, principal analyst with Mercury Research in Cave Creek, Arizona. This was down slightly from Intel's 83.5 percent market share in last year's first quarter. Chips based on the x86 instruction set run software based on Microsoft's Windows operating system or the various versions of the Linux operating system, for the most part.

AMD shipped 16.9 percent of x86 processors in the quarter, up from 15 percent market share last year. The remainder of the x86 market is fulfilled by companies such as Transmeta and Via Technologies, which combined typically account for less than 2 percent of the market.

AMD can thank its Opteron and Athlon 64 processors for its recent market share gains, McCarron said. "It fundamentally comes down to AMD being more competitive now than they were a couple of years ago," he said.

Intel executives have acknowledged the increase in competition from AMD, especially in the server market where AMD barely registered before the introduction of the Opteron chip two years ago. The competition is also evident in the desktop market, where AMD has started to ship its Athlon 64 and Sempron chips in greater volumes than last year, McCarron said.

The companies' market share figures have fluctuated a bit in past quarters, but for the most part Intel has continued to stay above the 80 percent mark. While AMD is in perhaps its strongest competitive position ever, the company's weakest product category happens to be one of Intel's strongest segments: the notebook market.

AMD has yet to transfer its desktop and server momentum to the notebook market, the fastest growing segment of the PC market for the last several quarters, McCarron said.

"Mobile is the one place where Intel is really strong. You would expect that's the most difficult place to compete," McCarron said.

In most years, shipments in the first quarter of the calendar year are down compared to the fourth quarter, but this year shipments were flat, McCarron said. This was a result of the continued strength of the notebook market, a trend that has not let up for several quarters, he said.

Mercury Research's data represents shipments of processors from chip companies to system builders, PC vendors and channel partners. It is not a measure of each company's market share among end users.

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