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News Article

AMD kicks back

News
The company gains slightly in fourth quarter microprocessor market
Although Advanced Micro Devices’ (AMD’s) struggles have dominated recent headlines, the company actually managed to turn around its fortunes slightly in the fourth quarter of 2007, gaining some share in the market for all types of microprocessors, according to iSuppli Corp. In the global microprocessor market, consisting of X86, RISC and other types of general purpose devices, AMD in the fourth quarter grew its share by 0.3 percentage points over the third quarter of 2007, according to iSuppli’s final fourth quarter ranking. Larger rival Intel Corp. increased its revenue by 0.2 percentage points sequentially. However, when comparing the fourth quarter 2007 results to the same period in 2006, only Intel grew its share, with its slice of the microprocessor market rising by 3.1 percentage points. In contrast, AMD lost 1.5 percentage points of share. “With strong PC demand in the fourth quarter, particularly in the notebook segment, microprocessor Average Selling Prices (ASPs) for both AMD and Intel held firm,” said Matthew Wilkins, principal analyst for Compute Platforms Research at iSuppli. “Global unit shipments of PCs in the fourth quarter rose by 14.2 percent compared to the same period in 2006. This strong demand, along with increased sales of higher end microprocessors, helped to sustain ASPs.” In the fourth quarter, iSuppli continued to observe the two microprocessor giants, Intel and AMD, accounted for an increasing share of total microprocessor market revenues. Combined, AMD and Intel accounted for 93 percent of overall microprocessor revenues in the fourth quarter of 2007, up 1.6 percentage points from the fourth quarter of 2006. On an annual basis the two accounted for just over 92 percent of market revenue in 2007, a gain of 1.4 percentage points from 2006. iSuppli’s quarterly microprocessor market share ranking is presented in the attached Table 1. Last year was challenging for AMD, with its market share declining by 2.9 percentage points, as illustrated in Table 2. In contrast, Intel’s share rose by 4.3 points. “The delay in the introduction of AMD’s Barcelona native quad-core microprocessors was a factor in the company’s performance for the year. Barcelona represents a clear area of competitive advantage for AMD compared to Intel, which still does not have a native quad-core microprocessor. However, the Barcelona delay has reduced the timeframe during which AMD can press that advantage.” Native quad core refers to placing all four microprocessor cores on a single chip, as opposed to portioning them onto two separate die. Intel is expected to launch its own native quad core microprocessors at the end of this year, Wilkins noted. The company also plans to release a six core version of its Xeon microprocessor in 2008. AMD’s recent problems came home to roost this week with the announcement the company plans to lay off 10 percent of its global workforce. “The major events in the 2008 microprocessor market included the slowdown of the price war between Intel and AMD, healthy growth in PC sales and particularly surging demand for notebooks,” Wilkins said. “In 2008, AMD’s Barcelona should hit its stride, setting the stage for a Battle Royale against Intel’s native quad core Nehalem parts at the end of the year. However iSuppli is maintaining a cautious view for 2008 while we wait and see how the credit crisis affects consumer spending and end equipment markets such as PCs.” ""
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