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News Article

Intel and AMD benefit from strong demand, price-war lull in Q3

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Intel Corporation and Advanced Micro Devices Incorporated (AMD) in the third quarter (Q3) both managed to gain share in the global microprocessor market due to robust sales of PCs and servers and the cessation of the companies' price war, according to iSuppli Corporations's final ranking.

In the third quarter, Intel accounted for 78.7% of global microprocessor revenue, up 0.3 of a percentage point from 78.4% in the second quarter. AMD fared even better, with its share rising by more than the twice the level of Intel's to reach 13.9%, up 0.6 of a percentage point from 13.3% in the second quarter.

 The two microprocessor suppliers gained at the expense of their smaller rivals, whose collective share of global revenue declined to 7.4% in the third quarter, down from 8.2 % in the second quarter. Intel and AMD benefited from strong sales of computers in the third quarter.

Global PC shipments, including desktops, notebooks and entry-level servers, amounted to 68.1 million units in the third quarter, up 13.8% from 59.9 million during the same period in 2006, and up 11.1% from 61.3 million in the second quarter of 2007.

The companies in their third-quarter financial calls said they had seen a reduction in the aggressive pricing that has ruled throughout most of 2007. This signifies the beginning of the end for the X86 microprocessor price war, iSuppli believes.

 "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.Several factors contributed to a reduction in microprocessor market share in the third quarter. "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," Wilkins said.

However, while the pricing battle may be coming to an end, Wilkins believes that the competition 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 45nm manufacturing process, neither company is resting on its laurels," Wilkins noted.

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