Chip Wars: Intel, AMD Competitors - XTREME-SOURCE

kambodianboi · 07-02-2008, 06:36 AM

Intel (NSDQ:INTC) picked up about a point of microprocessor market share in the global market over the previous quarter, while x86 rival Advanced Micro Devices (NYSE:AMD) gained more than two points year-over-year, according to Q1 2008 revenue numbers released Tuesday by technology research firm iSuppli.

Intel, headquartered in Santa Clara, Calif., remained the overwhelming leader in global microprocessor revenue for Q1 with 79.7 percent of the market, defined by El Segundo, Calif.-based iSuppli as comprising general-purpose Intel Architecture (IA) or x86 chips as well as those based on RISC and other non-IA architectures. Intel's first-quarter numbers represented a 1.2 percent sequential uptick over the chip giant's Q4 2007 revenue market share of 78.5 percent.

But Intel's numbers were also down in Q1 as compared to the same quarter a year ago, when the company cracked the 80 percent mark in terms of market share. The drop-off was slight, just seven-tenths of a point, but enough to bring Intel down from the 80.4 percent share it enjoyed in Q1 2007 to the psychologically less impressive upper 70s.

It would be tempting to say that Intel's year-over-year loss was Sunnyvale, Calif.-based AMD's gain. But the smaller x86 chip maker's 2.2 percent market share increase -- from 10.9 percent of global microprocessor revenue in Q1 2007 to 13.0 percent in Q1 2008 -- had twice as much to do with the shrinking share of other vendors besides the big two. Microprocessor makers not named Intel or AMD lost nearly a point-and-a-half in global market share year-on-year, dropping from 8.7 percent of revenues in 2007's first quarter to 7.3 percent in the first quarter of 2008.

While AMD appeared to be the largest long-term beneficiary of the further consolidation of the microprocessor market into an overwhelmingly x86-dominated affair, the financially beleaguered company may have cause for concern over its short-term numbers as identified by iSuppli. AMD lost just over a point in market share from last year's fourth quarter, when it collected 14.1 percent. And AMD's 1.1 percent sequential loss was just about matched by main rival Intel's 1.2 percent gain, with the remaining tenth of a point of revenue market share bleeding off all other microprocessor vendors taken as a whole.

For AMD, a company that has posted six straight losing quarters, shareholders had better hope that some combination of overall microprocessor market growth, margins and the performance of the chip maker's other businesses is at least inching the company further towards the black as its Q2 earnings call approaches. On the first order of business, iSuppli had some positive news for AMD, reporting 12.1 percent growth in first-quarter global PC unit shipments over the first quarter of 2007, from 62.4 million units shipped to 69.9 million. Included in the rising tide of PC shipments was eye-opening 30 percent growth for notebook shipments year-over-year.

Meanwhile, iSuppli reports that both chip makers' Average Selling Prices (ASPs) remained flat from the fourth quarter of last year into the first quarter of this year. Of course, given faster microprocessor product cycles and the cutthroat nature of past price wars between Intel and AMD, flat prices would almost seem to count as price hikes -- iSuppli describes the ASP stability as a reflection of "the robust demand situation" for the two companies' microprocessors.

Is the first-quarter picture painted by iSuppli mostly carrying through to present market performances? Chip watchers will get some answers on July 15, when Intel reports its second-quarter earnings, and more on July 17, when AMD presents its report. And as usual, the smaller company seems to have more on the line than its goliath rival.

Last December, AMD CEO Hector Ruiz promised steady sequential gains on the ledger sheet in 2008 ahead of a predicted return to profitability by the end of the third quarter of this year. With most of the costs associated with the 2006 acquisition of graphics chip maker ATI in its rearview mirror, AMD opened this year on the right track as per Ruiz's pledge.

The company reported first-quarter earnings that, while still $358 million in the red, represented a considerable year-over-year improvement over the $611 million lost in Q1 2007. Not to mention the whopping $1.77 billion deficit AMD suffered in Q4, much of it due to an impairment charge on the ATI merger.

AMD took a $600 million hit in the second quarter of 2007. Can the chip maker cut that figure in half this time around? And would even that be enough to keep investors marching to the Ruiz tune?

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kambodianboi · 07-02-2008, 06:39 AM

I dont see how both of these company be going down. People constantly are buying/building PC. But it seems as of now, there isn't anything new yet to have a boom to the consumers, yet.

punqewe · 07-02-2008, 11:55 AM

what they need is a third company to compete with....I knwo there was one company that was gunna start making chips but I dunno what happened to them. If there was a third company,it'd at least put a little pressure and some questions in the two main companies plans.

ANYTHING is a threat if you don't know the whole story. Even just talk from a third company is enough to spark something.

kambodianboi · 07-02-2008, 12:09 PM

From what I know, IBM is still in the CPU business, but they are private now. Basically they only make CPU on request, or for their server/products only now.

Lord Sesshomaru · 07-02-2008, 05:35 PM

Hell IBM either designed or had a hand in the 360, Cell, and Wii CPU's.

I went with the neutral ground, Intel chipset, CPU and Crossfire chipset/ATI GPU. The processor debate only took about 10 seconds to me honestly, given how cheap the quads have gotten and how overclockable they are. Also, I like the flexibility of crossfire. Yes SLI will win every bench mark, but I like the ability to use any of the 3x series of GPUs with Crossfire.

That said, I'm quite sure the Phenom 9850 would've made a nice CPU, but Intel was just too appealing to me so I opted for the Q6700. No regrets so far.

bryctucker · 07-02-2008, 06:26 PM

GO AMD. i know Intel is better, but with AMD, you can overclock the hell out of them. and ati, they might not be good, but they have some amazing ideas. like CrossfireX Hybrid, if you have a built in ATI card. you can use Crossfire with that card and a PCI-E 2.0 card if you have one. and like it was mentioned before, you can use any card from the series of cards you have, like if you have a HD 4XXX series, you can use ANY card from the 4 series. and so on. ATI can be overclocked really easy too. just use catalyst. i know that nVidia had Ntune, but i've tried it, don't like it. Catalyst is better. i know that the drivers are kinnda flakey, but im sure that that can be fixed.

oh and btw, my computer is completely AMD, i have the AMD Athlon 64 X2 4200+, 2.22 ghz, (overclocked =)), ATI HD 3650 800 MHZ Core Clock Speed, and 1 gb of video ram, AMD 790X chipset on a MSI K9A2 CF motherboard, have had NO ploblems with VISTA BUISNESS. its amazing, playing games in DX10 that i didnt pay for, lol, i got my copy of vista free from someone who is licensed to MSDN

NEVER had a problem with AMD, i know ppl may have read the problems i've had earlier, and that was with the case and HDD, not AMD.

AMD RULES,

oh and did i mention the are a helava lot cheaper then Intel.

by about $150 dollars for the Athlon compared to the Core 2 at 2.2 ghz

=P

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