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AMD claws back market share

Michael Kanellos CNET News.com

Published: 27 Oct 2005 09:15 BST

Chipmaker AMD made notable market share gains against Intel in the third quarter, according to a new report.

Intel's market share dropped 1.4 points to 80.8 percent in third quarter ending September 30, from 82.2 percent in the second quarter, according to a report on Taiwanese tech site Digitimes that cited figures from Mercury Research.

AMD, meanwhile, saw its processor share rise 1.6 points from 16.2 to 17.8 percent. AMD plucked most of its gains from Intel, but also snagged some from flagging Transmeta.

Also citing figures from Mercury Research, Investment bank JP Morgan Chase on October 25 issued a note stating that Intel's market share dropped from 82 percent in the second quarter to 81 percent in the third quarter. Mercury has not released its report publicly and has declined to comment.

"Intel lost 1 point of market share in both the desktop and notebook segments, while losing 2 points of market share in the server segment," JP Morgan wrote.

A gain of nearly two points may not sound like much, but in the glacial battle between these two PC processor vendors, it's a pretty big move. Back in the fourth quarter of 2004, AMD's market share jumped from 16 percent to 16.6 percent. The 0.6 point was the biggest leap for AMD in eight quarters.

Between the fourth quarter of 2003 and fourth quarter of 2004, Intel lost 1.5 share points, roughly equivalent to the rise shown the most recent report, but stretching across a the period four times as long.

Gains in this market, however, can be volatile. After hitting 16.6 percent market share in the fourth quarter of 2004, AMD saw its share rise to 16.9 percent, but then drop again to 16.2 percent in the second quarter. So, some of the gain during the current quarter involved reclaiming lost land.

A bump in market share was expected after AMD blew past estimates in its third quarter financial report while Intel missed analysts' estimates. Recent analyses also have indicated that AMD has outsold Intel in desktops in US retail stores.

AMD recently has revived its goal of achieving a 30 percent market share, fuelled partly by new chip fabrication facilities. In the past several years, however, AMD has not come close to that figure. The company had more than a 20 percent market share for a brief period in 2000, but then sank back to within the 15 to 17 percent band.