A Struggling Intel Stays on top
By Debra Bulkeley -- Movers & Shakers, 6/22/2006
How hard will AMD continue to nip at Intel's heels in the microprocessor arena?
Comparing this year's top 10 microprocessor leaders to last year's shows how little movement there was in the list. After all, Intel is still No. 1, with a commanding 82 percent of the microprocessor market, according to 2005 market-share numbers from iSuppli. Advanced Micro Devices remains a distant second with 11 percent, followed by Freescale Semiconductor with 2.8 percent and IBM Microelectronics with 2.3 percent (see chart).
But the revenue numbers don't tell the whole story.
While AMD is second to Intel, the former racked up a 46.5 percent increase in its 2005 revenue compared with 2004 (Intel had a 12 percent increase for the same period and has announced big spending cutbacks ). Indeed, AMD was the fastest growing semiconductor company in the world, according to the May issue of Electronic Business magazine. Intel was No. 11. And AMD gained market share over Intel last year when it introduced its Opteron chips, for the server market. Designed to consume less powe, Dell recently became an Opteron processor.
The two companies have competed to be the first to market with a dual-core processor. Intel was first with a dual core for PCs, and AMD was first to bring dual-core chips to servers. Now both companies are preparing to introduce dual-core processors for the mobile market. AMD will launch the Turion 64 X2 mobile technology in the second quarter of 2006; Intel will be ramping in volume its mobile Merom processor in the third quarter of 2006.
Intel unveiled its new Core microarchitecture at the Intel Developer Forum in March, touting it as a new foundation for Intel architecture-based desktop, mobile and mainstream server multicore processors.
The Core microarchitecture offers dual-core products, each targeted to a specific platform: mobile, server and desktop. The product—Woodcrest, Conroe and Merom—will be ramping in volume in the third quarter of 2006, according to Stephen Smith, vice president and director of Intel's desktop platform operations.
One of the features Smith emphasizes is the technology's energy-efficient performance. For example, he claims that the server processor, Woodcrest, will have an 80 percent improvement in performance and a 35 percent reduction in power compared with Intel's high-end dual-core 2.8-GHz Xeon processor. The desktop product, Conroe, promises a 40 percent improvement in performance and close to a 40 percent reduction in power, he said.
While the new products will improve performance in each market segment, perhaps the biggest impact will be felt in the mobile market, since dual core is already available on the desktop, Smith says. Merom is expected to deliver a more than 20 percent increase in performance compared with Intel's Core Duo processor (formerly called Yonah), Smith says.
"With Merom [available] in the second half of the year, this allows us to bring dual-core capability in notebooks and get improved performance," Smith says. He points to five hours of battery life for a notebook with the new dual-core processor.
"I think what this allows us to do is continue a leadership performance in notebooks and still have [technology] that will be ready for the [Microsoft] Vista adoption, which we think will happen in the beginning of 2007," Smith says.
AMD is also touting a new core that's designed from the ground up to be 64-bit and multicore, explains Margaret Lewis, director of commercial solutions marketing at AMD.
"Moving forward, we saw it wasn't going to be a world where 32-bit was the answer. Especially in terms of performance, in terms of power—we came up with an architecture that supports 64-bit to support multicore and also had an architecture so it could move," she says.
The road map includes Opteron, Athlon and Turion, the company's chip for the mobile market.
David Rooney, division product manager in the mobile division at AMD, says that the company's Turion 64 chip, which was introduced in March 2005, will play an important role in the mobile market. "The notebook market is a very important market for AMD," Rooney says. "The low-power design [of Turion] is really aimed at the thin-and-light market."
Intel has a lead in the consumer PC market, including notebooks. AMD has made strides in the server market. "The server market is the one that has caught everyone's attention," Lewis says, adding that AMD controls more than 40 percent of the server market in the United States.
The biggest challenge for AMD, Lewis says, is for customers to see repeated AMD design wins over Intel. "People need to continue to see repeated success from our road map. They need to continue to see that we will deliver innovation," she says.
Suffice it to say that all companies in the microprocessor market are looking for a piece of several hot revenue spots: video games, servers, desktops and the mobile market.
IBM Microelectronics, for instance, saw its revenue skyrocket 138 percent in 2005 compared with 2004, according to iSuppli's rankings. Part of that jump can no doubt be attributed to its role in supplying microprocessors for Microsoft's Xbox 360.
As consumer electronics users and business users demand the ability to perform multiple concurrent tasks on their cell phones and computers, look for multicore to be the next big wave. The multicore market, in fact, is set to explode, according to iSuppli. Shipments of multicore processors are predicted to grow to 638 million units in 2015, up from 14.8 million in 2005, it says.
Debra Bulkeley is executive editor at Electronic Business.
| (Millions of Dollars U.S.) | |||||
| 2005 Rank | 2004 Rank | Company Name | 2005 Revenue | 2004 Revenue | Percent Change |
| 1 | 1 | Intel | 28,116 | 25,093 | 12.0% |
| 2 | 2 | Advanced Micro Devices (AMD) | 3,806 | 2,598 | 46.5% |
| 3 | 3 | Freescale Semiconductor | 951 | 916 | 3.8% |
| 4 | 4 | IBM Microelectronics | 781 | 328 | 138.1% |
| 5 | 5 | Samsung Electronics | 109 | 144 | -24.3% |
| 6 | 6 | Marvell Technology Group | 78 | 65 | 20.0% |
| 8 | 7 | VIA Technology | 67 | 60 | 11.7% |
| 9 | 8 | Fujitsu | 53 | 53 | 0.0% |
| 7 | 9 | NEC Electronics | 51 | 60 | -15.0% |
| 14 | 10 | Beijing Vimicro Microelectronics Co Ltd | 46 | 14 | 228.6% |
| All Other Companies | 130 | 125 | 4.0% | ||
| Total | 34,188 | 29,456 | 16.1% | ||
| Source: iSuppli | |||||
