AMD must double processor market share to survive

AMD needs to more than double its market share to survive as a processor maker, the company said

Advanced Micro Devices needs to more than double its share of the microprocessor market to survive, according to a brief filed by the company's lawyers in its antitrust lawsuit against Intel.

At the end of 2007, AMD had 13 percent of the processor market, "less than half of what it requires to operate long-term as a sustainable business," the brief said, explaining that Intel's alleged efforts to shut the company out of the processor business had largely succeeded.

"Measured on a revenue share basis, AMD made little progress growing its slice of the pie," it said.

The argument that Intel's alleged anti-competitive behavior has so hurt AMD that its future is in jeopardy is crucial to the company's claims for relief, including damages. But the claims could further spook corporate customers already wary of the company's financial troubles.

Companies generally make computer purchasing decisions with a long-term view and plan to use and purchase similar systems for many years to come. Fresh concerns about AMD's long-term sustainability coupled with existing worries about the company's fiscal health -- weakened by the delayed release of its Quad-Core Opteron processor and mounting long-term debt-- could lead CIOs to consider computers based on Intel's chips instead.

"It will push them in the other direction," said Rajnish Arora, director of enterprise server and workstation research at IDC Asia-Pacific.

AMD's brief was heavily redacted by the court and details of Intel's alleged anti-competitive behavior and its relationship with major computer makers were largely blacked out. But the general thrust of AMD's argument was clear: Intel allegedly paid computer makers to rely exclusively, or almost exclusively, on its chips.

The effect of these and other alleged tactics employed by Intel outweighed gains that AMD made with its successful line of Opteron server chips, which came out in 2003.

"That AMD gained some share and revenue is immaterial. It gained sufficiently less share and sufficiently less revenue so as to suffer a critical diminishment of its innovation roadmap," the brief said.

AMD's concerns about its future are legitimate, IDC's Arora said, underscoring the capital intensive nature and short product cycles of the processor business. "They are going to be challenged. They need to grow the business and scale it up," he said.

The key for AMD is to generate strong end user demand for its processors, which will in turn mean more computer makers will sell systems based on its chips. "It's all driven by customer demand," Arora said.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Sumner Lemon

IDG News Service
Show Comments

Brand Post

Shining a light on creativity

MSI has long pushed the boundaries of invention with its ever-evolving range of laptops but it has now pulled off a world first with the new MSI Creative 17.

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?