October 30, 2006 12:33 PM PST
Intel gains server share, AMD gets notebook boost
AMD had been making strides in the server market for several quarters, while Intel dominated the notebook market. But momentum swung the other way in the third quarter, with Intel regaining market share in server processors while AMD's notebook processor shipments surged, said Dean McCarron, an analyst with Mercury Research.
Overall, Intel shipped 76.1 percent of all desktop, notebook and server processors that use the x86 instruction set during the quarter. AMD owned 23.3 percent of that market. AMD's overall momentum continued; a year ago, Intel had 80.7 percent of the market while AMD held 17.7 percent. Mercury Research measures the number of chips shipped into distribution channels, not the breakdown of how processors appear in end systems.
Despite the horrible second quarter suffered by Intel and AMD, third-quarter shipments weren't as bad as some had thought, McCarron said. Prices, however, are still down significantly. The decline was not as bad as in the second quarter, but it was still notable, he said, declining to provide specific numbers.
Buoyed by the launch of its Xeon 5100 server processor in June, Intel's server shipments outpaced AMD's in the third quarter, McCarron said. AMD had been steadily picking away at Intel during the last few years because of the performance advantage enjoyed by its Opteron processor, but the Xeon 5100 tilted that back in Intel's favor.
AMD's server processor shipments still grew at a decent clip, but "pent-up demand" for Intel's server products and aggressive pricing helped the company grow shipments faster than AMD, McCarron said. This growth was primarily in the dual-processor server market, which constitutes the vast majority of x86 server shipments, he said. He declined to provide a specific breakdown of the companies' share of the server market.
On the notebook side, AMD's shipments surged 50 percent from the second quarter of this year. One possible explanation for the jump could be the longer manufacturing process for notebooks, McCarron said. Notebooks tend to take longer to assemble than desktops, which would mean that notebook manufacturers need to buy processors in the third quarter for systems they intend to ship in the fourth quarter. Evidence is also building that Dell, coming off new AMD servers and desktops, is preparing to launch an AMD-based notebook in time for the holiday shopping season.
The unexpected surge in mobile shipments could also explain shortages of AMD processors that have been reported in Taiwan. AMD's in a bit of a manufacturing bind at the moment, as processor shipments are increasing before it has completed its transition to new, more efficient manufacturing technologies.
Both companies held their ground in the desktop market. Intel lost a chance to gain share during the quarter because it was unable to ship the integrated graphics version of a chipset for its new powerful Core 2 Duo processors until late in the quarter, McCarron said. Intel executives noted the delay in the 965G chipset during its earnings conference call two weeks ago.