AMD gains market share in Q2

By Colleen Taylor, Contributing Editor -- Electronic News, 7/20/2007

Despite having posted a $457 million loss in its earnings report this week, some analysts say that Advanced Micro Devices Inc. (AMD) has cause to celebrate its Q2 performance.

According to a preliminary ranking released today by market research firm iSuppli Corp., AMD finally stabilized its market share in Q2 after six months of microprocessor market-share losses to rival chipmaker Intel Corp. http://www.intel.com

During Q2, iSuppli said, AMD accounted for 11.4 percent of worldwide microprocessor sales, up half a percentage point from 10.9 percent in Q1. This rise brought to an end a period of decline for AMD that saw its market share dwindle by nearly six points from 16.8 percent in Q3 2006 to 10.9 percent in Q1 2007.

Meanwhile, iSuppli said, Intel experienced a corresponding half-point decline in Q2, with its share decreasing to 80.3 percent, down from 80.8 percent in the previous quarter. In its Q2 earnings report released this week, Intel announced Q2 revenue of $8.7 billion, up 8 percent from Q2 2006, and net income of $1.3 billion, up 44 percent year-over-year.

"The main cause of the market-share reversal of fortune was a decline in Intel's microprocessor average selling prices," Matthew Wilkins, principal analyst for compute platforms research at iSuppli, said in a statement. "This caused Intel's revenue share to decline--although its microprocessor unit shipments were up sequentially."

Nevertheless, the slight change in fortunes for AMD does not seem to indicate a major change in the chip market just yet. "However, with only a 1 percentage point swing in market share between the two companies in the first quarter, the second quarter essentially maintained the status quo of the first quarter, with no significant trade in market-share position between the two main microprocessor suppliers to the PC and server segments," Wilkins concluded.