What a difference a year makes.

In 2006, Advanced Micro Devices was still enjoying the good tidings that came along with its Opteron chip, while Intel was fighting to recapture market share and deliver a new line of processors that would help it regain momentum. The companies traded places in 2007, with AMD trying to staunch the bleeding from a prolonged price war and flailing about from a failure to get its Barcelona chip out on time, while Intel sat back and watched revenue and profits improve behind its Core processors.

AMD started off the year on the wrong foot with an inventory write-off. That move was precipitated by a decision to favor its new friend Dell over existing channel partners, a deal that went sour when demand for Dell products fell off. That led to a massive loss, and was followed by an application for a $2.2 billion loan to help pay off the company's acquisition of ATI Technologies.

Barcelona, which AMD so desperately needed to prop up its average selling prices and maintain market share earlier in the year, finally made its debut in September. That was six months later than CEO Hector Ruiz would have hoped, and the chip failed to live up to the performance goals that AMD executives had set earlier in the year. Toss in a bug at the end of the year that delayed the volume launch of Barcelona into 2008, and you can see why AMD executives are eager to get new calendars for their offices.

Intel, on the other hand, has returned to form after a disastrous couple of years highlighted by road map upheaval and layoffs. The company's Core processors continued to improve, and Intel's decision to use a packaged method of two dual-core chips to reach the server market with quad-core chips quickly looked much more prescient in light of AMD's struggles with the integrated four-core design it chose for Barcelona. The company hit a few snags with its graphics and digital-home strategies, but otherwise had an excellent year as it set its sights for 2008 on Silverthorne, a low-power chip designed to worm its way into smaller and smaller devices.

Intel also expanded its lead on the manufacturing front, successfully introducing 45-nanometer chips with a new transistor design that represented the first change to the basic materials of the transistor since the 1960s. It also opened a new chipmaking facility in Arizona, and announced plans to build a chip plant in China by 2010 just prior to holding its Intel Developer Forum in Beijing.