Intel will recall 2004 as a time of troubles, while AMD will relive the year much more fondly.

Other problems emerged, as well. Early versions of a chip used with Express 915, a major chipset for desktop PCs, suffered a manufacturing glitch in June. The company also built up an inventory glut, due in part to better-than-expected product yields from a new chip production process. Intel also admitted to miscalculating customer demand.

Still, Intel continued to dominate the PC processor market with some 82 percent of shipments. Its Pentium M did well, as did Xeon server chips, which received 64-bit capabilities near year's end.

During October, Intel cancelled plans for its 4GHz Pentium 4, due in the first quarter of 2005. The move traded the 4GHz chip for a less speedy version of the Pentium 4 chip with a larger 2MB allotment of onboard memory. Dual-core or two-processor-in-one-chip Pentiums will follow, it said. The chips won't necessarily be faster, but they'll offer better overall performance and come with extras, including features that improve data security. This features-first strategy marks a huge change for the once speed-obsessed Intel. But it's also likely to give the chipmaker at least one good thing to remember about 2004.

Down the highway in Sunnyvale, Calif., AMD had a good year.

The chipmaker saw continued adoption of its latest processors, the Athlon 64 for PCs and Opteron for servers. By its one-year anniversary, Opteron received fairly broad acceptance among server manufacturers. Sun Microsystems and Hewlett-Packard formed partnerships with AMD and adopted Opteron chips in their servers.

AMD's PC processors, including its Athlon XP and Sempron, appeared in a number of mid-to-lower-price desktops and notebooks. Its Athlon 64, found mainly in higher-end models, also made its way into more systems as the year progressed.

AMD's efforts showed in the market. It garnered nearly 16 percent of PC processor unit shipments during the third quarter, according to Mercury Research. Profits also came more easily for AMD, which posted a 12-cent-per-share profit in the third quarter, its fourth straight quarter in the black.

AMD will also deliver dual-core chips in 2005, promising to continue its rivalry with Intel into the year and beyond.