Q1 MPU market share wrap-up: Intel grew stronger as AMD faltered

By Colleen Taylor, Contributing Editor -- Electronic News, 4/23/2007

With the release last week of Q1 financial results from microprocessor making rivals Intel Corp. and Advanced Micro Devices Inc. (AMD), analysts at one market research firm are proclaiming Intel's officially re-strengthened status as the market's leader.

According to a newly revised estimate from iSuppli Corp., Intel gained 4.5 percentage points in the global microprocessor market in Q1. The Santa Clara, Calif.-based company controlled 80.2 percent of global microprocessor revenue during Q1, up from 75.7 percent in Q4 2006, iSuppli said. Meanwhile, AMD lost a nearly corresponding amount of share, 4.6 points, with its portion of microprocessor revenue falling to 11.1 percent in the Q1, down from 15.7 percent in Q4.

In what AMD's CFO called a "disappointing and unacceptable" Q1 financial report last week, the company posted revenue of $1.23 billion, 30 percent down from its Q4 sales and 7 percent lower than its sales in Q1 2006. In addition, the company suffered a Q1 net loss of $611 million and an operating loss of $504 million.

Meanwhile, Intel kicked off the year with a relatively strong performance, with Q1 operating income of $1.7 billion, down 3 percent from Q1 2006 but up 13 percent from Q4 2006.

Even stronger was Intel's Q1 net income at $1.6 billion, up 19 percent from Q1 2006 and up 7 percent from Q4 2006.

"We knew Intel had gained share compared to AMD in the first quarter, but the sales gap between the companies widened to a much greater degree than we had expected," Dale Ford, VP of market intelligence services for iSuppli, said in a statement. "The microprocessor market-share disparity between the companies expanded to 69.1 points in Q1, up from 60 points in Q4."

"An analysis of Intel's results show the company's sales gains came in its strategic line of Core 2 Duo products, its mainstream family of dual-core PC microprocessors," Matthew Wilkins, principal analyst of compute platforms for iSuppli, added in a statement. "This represents a major reversal of fortune compared to 2006, when AMD had the advantage with its popular dual-core microprocessors and gained share from Intel."