News Article
AMD gains more than expected
iSuppli Corp.'s final estimate of microprocessor market share in the second quarter reveals Advanced Micro Devices Inc. (AMD) made greater gains than originally thought.
iSuppli Corp.'s final estimate of microprocessor market share in the second quarter reveals Advanced Micro Devices Inc. (AMD) made greater gains than originally thought.
AMD in the second quarter of 2007 gained 2.5 percentage points compared to the first quarter to take a 13.4 percent share of overall microprocessor revenue.
The overall microprocessor market consists of RISC and general-purpose devices, as well as the X86-type chips for PCs sold by AMD and rival Intel Corp.
Meanwhile, Intel in the second quarter suffered a 2 percentage point decrease in revenue share, giving it a still-commanding 78.8 percent portion of the market.
This was a far greater than the preliminary 0.5 percentage-point increase for Intel and the 0.5 percent increase for AMD iSuppli estimated in July.
"AMD's performance in the second quarter of 2007 was both impressive and much needed, as the company managed to halt the three-quarter market share advance of archrival Intel," said Matthew Wilkins, principal analyst for compute platforms research at iSuppli.
AMD's second-quarter advance brought to an end a period of decline for the company that saw its market share dwindle by nearly 6 points from 16.8 percent in the third quarter of 2006 to 10.9 percent in the first quarter of 2007.
AMD's rise in the second quarter was due to increased shipments for notebook, desktop, and server microprocessors, despite a decline in the overall microprocessor Average Selling Prices (ASPs).
Intel too suffered a decline in its microprocessor ASPs, which spurred the decrease in its revenue share during the quarter.
The attached table presents iSuppli's estimate of microprocessor market share in the second quarter.
"Intel's ASP declined due to pricing pressure in low-end desktop as well as notebook microprocessors," Wilkins said.
Dancing with the elephants
Conditions in the microprocessor market now are dominated by severe pricing pressure. This pressure originally arose at about the time when Intel launched its new microprocessor line in 2006.
AMD and Intel are continuing to react to each others' pricing. Because of this, the aggressive pricing environment is expected to continue throughout 2007, Wilkins said.
Pricing pressure was particularly aggressive in the low-end segments of both the desktop and the notebook PC markets during the second quarter. It is not difficult to see why, with the notebook PC platform being in such demand; iSuppli predicts unit growth of 26 percent in 2007. PC OEMs and semiconductor suppliers alike want to maintain this high level of demand and are pricing their products accordingly.
Specifically, value notebooks in the consumer market have been commanding increasingly aggressive pricing for some time now.
While AMD and Intel have been battered by the price war, this is nothing compared to what smaller players are experiencing.
"The combined position of Intel and AMD shows how these two companies have steadily eaten up share from the other microprocessor suppliers to the tune of 2.3 percentage points during 12 months," Wilkins said. "This feat is all the more impressive considering our rankings are revenue-based, and that we have seen PC microprocessors under huge pricing pressure in the past 12 months. As the old saying goes: ‘when elephants dance, the grass suffers."
iSuppli Table: Q2 2007 Total Microprocessor Worldwide Market Revenue Market Share (Percentage of Global Revenue)
AMD in the second quarter of 2007 gained 2.5 percentage points compared to the first quarter to take a 13.4 percent share of overall microprocessor revenue.
The overall microprocessor market consists of RISC and general-purpose devices, as well as the X86-type chips for PCs sold by AMD and rival Intel Corp.
Meanwhile, Intel in the second quarter suffered a 2 percentage point decrease in revenue share, giving it a still-commanding 78.8 percent portion of the market.
This was a far greater than the preliminary 0.5 percentage-point increase for Intel and the 0.5 percent increase for AMD iSuppli estimated in July.
"AMD's performance in the second quarter of 2007 was both impressive and much needed, as the company managed to halt the three-quarter market share advance of archrival Intel," said Matthew Wilkins, principal analyst for compute platforms research at iSuppli.
AMD's second-quarter advance brought to an end a period of decline for the company that saw its market share dwindle by nearly 6 points from 16.8 percent in the third quarter of 2006 to 10.9 percent in the first quarter of 2007.
AMD's rise in the second quarter was due to increased shipments for notebook, desktop, and server microprocessors, despite a decline in the overall microprocessor Average Selling Prices (ASPs).
Intel too suffered a decline in its microprocessor ASPs, which spurred the decrease in its revenue share during the quarter.
The attached table presents iSuppli's estimate of microprocessor market share in the second quarter.
"Intel's ASP declined due to pricing pressure in low-end desktop as well as notebook microprocessors," Wilkins said.
Dancing with the elephants
Conditions in the microprocessor market now are dominated by severe pricing pressure. This pressure originally arose at about the time when Intel launched its new microprocessor line in 2006.
AMD and Intel are continuing to react to each others' pricing. Because of this, the aggressive pricing environment is expected to continue throughout 2007, Wilkins said.
Pricing pressure was particularly aggressive in the low-end segments of both the desktop and the notebook PC markets during the second quarter. It is not difficult to see why, with the notebook PC platform being in such demand; iSuppli predicts unit growth of 26 percent in 2007. PC OEMs and semiconductor suppliers alike want to maintain this high level of demand and are pricing their products accordingly.
Specifically, value notebooks in the consumer market have been commanding increasingly aggressive pricing for some time now.
While AMD and Intel have been battered by the price war, this is nothing compared to what smaller players are experiencing.
"The combined position of Intel and AMD shows how these two companies have steadily eaten up share from the other microprocessor suppliers to the tune of 2.3 percentage points during 12 months," Wilkins said. "This feat is all the more impressive considering our rankings are revenue-based, and that we have seen PC microprocessors under huge pricing pressure in the past 12 months. As the old saying goes: ‘when elephants dance, the grass suffers."
iSuppli Table: Q2 2007 Total Microprocessor Worldwide Market Revenue Market Share (Percentage of Global Revenue)
