Intel-AMD price war cools, business heats up

By Suzanne Deffree, Managing Editor, News -- Electronic News, 12/3/2007

Peacetime in the price war between Intel Corp. and Advanced Micro Devices Inc. (AMD) has benefited both of the rival MPU makers, according to the latest research from iSuppli Corp.

The firm reported today that both managed to gain share in the global microprocessor market in Q3 on solid sales of PCs and servers and the end of the companies’ price war.

In the quarter, Intel accounted for 78.7% of global microprocessor revenue, up 0.3% from 78.4% in Q2, iSuppli data showed. AMD’s share rose by more than the twice the level of Intel’s to reach 13.9%, up 0.6% from 13.3% in the prior quarter, the firm reported. (See table below for more.)

The gains came at the expense of smaller players in the MPU market, which saw their collective share of global revenue declined to 7.4% in Q3, down from 8.2% in Q2.

Together, number 1 ranking Intel and number 2 ranking AMD claimed almost 93% of global microprocessor revenue in the quarter, a near 2 percent increase year over year, according to iSuppli.
 
The two companies did so on strong sales of computers, which saw shipments of 68.1 million units in Q3, up 13.8% from 59.9 million during the same period in 2006, and up 11.1% from 61.3 million in Q2, iSuppli reported. Both Intel and AMD noted on their respective quarterly financial calls that they had seen a reduction in the aggressive pricing, which, according to iSuppli, signals the beginning of the end for the X86 MPU price war.

“The combination of strong PC and server demand, combined with stable microprocessor prices, led to a prosperous quarter for both Intel and AMD,” said Matthew Wilkins, principal analyst at iSuppli, in a statement. “Pricing trends were influenced by many variables, including the consistent strength in computing markets, Intel’s rapid migration to its new Core 2 architecture microprocessors, and the increasing penetration of multi-core products in the market.”

And while the pricing war may be coming to an end, iSuppli reported competition between the two rivals will continue to be extremely fierce.

“AMD’s launch of Barcelona and Barcelona-derived products gives the company a stronger portfolio with which to compete, and with Intel shipping its products based on its new 45-nm manufacturing process, neither company is resting on its laurels,” Wilkins noted.

For more recent data from iSuppli, see “iSuppli: 2007 winners and losers separated by competitiveness.”

Q3 2007 global microprocessor market share percentages (percentage of revenue)

Source: iSuppli Corp., November 2007

Editor’s note: The table presents iSuppli’s final revenue ranking of global general-purpose MPU suppliers in Q3. This ranking accounts for sales of all types of general-purpose microprocessors, including RISC chips, as well as the PC-oriented X86 devices sold by Intel and AMD.