AMD gains processor market share on Intel

After five quarters of declining market share, Advanced Micro Devices gained ground in chip shipments over chief rival Intel during the first quarter of 2009, IDC said on Tuesday.

AMD saw its market share in processor shipments reach 22.3 percent during the first quarter of 2009, gaining 4.6 percent of the market compared with the fourth quarter of 2008. Intel lost 4.7 percent of the total market to reach a 77.3 percent share, IDC said in a survey.

AMD saw its market share increase because of a pricing advantage over Intel and a strong increase in desktop shipments, said Shane Rau, research director at IDC. Sequentially, AMD chip shipments increased 13 percent while Intel's shipments declined 16 percent.

Intel's sequential decline was partly due to suppliers holding back on purchases as they tried to clear up excess inventory of mobile processors, especially Atom processors for netbooks. Shipments of Atom processors recorded a sequential decline of 33 percent in the first quarter of 2009.

AMD has been restructuring its operations in an effort to reach profitability after more than two fiscal years of losses. The company last week merged its graphics and chip operations. Before that, it spun off its manufacturing assets to GlobalFoundries in order to cut manufacturing costs and focus on chip design.

AMD saw its mobile-processor market share reach 15 percent, grabbing 4.7 percent more of the market, while Intel's share fell to 84.3 percent from 89.1 percent. AMD also gained 3.8 percent of the market for desktop chips to reach 29.8 percent. Intel gave up 3.9 percent of the desktop chip market.

However, AMD lost 1.2 percent of the server and workstation chip markets, while Intel picked up the same amount to reach 89.3 percent.

AMD's gains couldn't stop the overall decline in worldwide processor shipments. Shipments reached around 65 million during the first quarter, a 13 percent year-over-year decline and a 10.9 percent sequential drop.

Even though excess inventory of desktop and mobile chips has been cleared out, unit shipments may continue to decline as customers hold back on PC purchases during the recession, Rau said.