AMD makes its own market share history

AMD gains two points of market share during the fourth quarter of 2006
Written by John G. Spooner, Contributor

Advanced Micro Devices has, once again, gained a significant amount of market share during a fourth quarter. The company picked up two points of market share in the fourth quarter of 2006, according to a report, here, by Stephen Shankland.

AMD increased its total share of the x86 processor market to 25.3 percent during the fourth quarter, versus 23.3 percent in the third quarter of 2006, the report says. Intel’s share slipped to 74.4 percent for the fourth quarter, down from 76.0 percent in the third. That makes two big fourth quarter gains in a row for AMD, which picked up almost four points of market share during the fourth quarter of 2005, giving it 21.4 percent of the market for that period.

The Shankland report, which cites figures from Mercury Research, revealed that AMD’s unit shipment increases—the chipmaker reported an overall sequential unit shipment increase of 19 percent in the quarter—came thanks to higher shipments of its PC processors. It shows that AMD continues to enjoy strong demand for its chips, particularly in the hot-selling notebook space.

However, not all of the news was good for AMD. The chipmaker’s Opteron server processor market share slid by more than one point to 23.6 percent, Shankland’s report says, as Intel’s dual-core and quad-core Xeons proved more competitive.

Despite the fact that server chips account for a relatively small number of unit shipments, the chips are hugely important for AMD and Intel in that they earn more revenue and return more profit, per chip, than desktop and notebook processors. Thus a swing in server processor pricing—in this case price reductions as AMD reacted to pressure from Intel—or unit shipments have significant affects on the companies financials. You can bet that Intel, which reported recording record server processor shipments in the fourth quarter, will be looking to repeat that performance in the future.

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