A price war cease-fire saw Intel's stranglehold on the global microprocessor market grow incrementally tighter in the third quarter, technology research firm iSuppli reported Monday, while the chip leader's chief x86 rival, Advanced Micro Devices, continued to bounce back from its market-share low point in Q1 2007.
"The companies in their third-quarter financial calls said they had seen a reduction in the aggressive pricing that has ruled throughout most of 2007. This signifies the beginning of the end for the x86 microprocessor price war," iSuppli claimed in a statement attached to its Q3 2007 Worldwide Microprocessor Market Share report.
In the third quarter, Intel and AMD combined for 92.6 percent of global microprocessor revenue, increasing from 91.7 percent sequentially and up 1.7 percentage points from the duo's 90.9 percent market share in Q3 2006. Taken as a group, other microprocessor players like IBM, Freescale, Marvell and VIA saw their market share slip from 8.2 percent in the second quarter to 7.4 percent in the third, iSuppli reported.
That both Intel and AMD were able to gain share in the third quarter can be attributed to "robust sales of PCs and servers and the cessation of the companies' brutal price war," according to iSuppli.
The lion's share of that revenue dominance was Intel's, which had 4.6 percent year-over growth and ticked up its sequential performance by 0.3 of a percentage point to 78.7 percent of the market. Santa Clara, Calif.-based Intel continued a string of strong quarterly performances since its dip in mid-2006 to less than 75 percent of the microprocessor market but still couldn't match its recent market-share peak of 80.8 percent in the first quarter of this year.
AMD actually increased its revenue share at a better clip than Intel, with the smaller chipmaker gaining 0.6 of a percentage point on its second-quarter numbers to reel in 13.9 percent of microprocessor revenues in Q3. But the Sunnyvale, Calif.-based company's improved third-quarter revenue share could only partially offset what has been a market share-losing year. AMD has lost 2.9 percent of the microprocessor market since the heady days of its dual-core Opteron advantage in Q3 2006, when it pulled in 16.8 percent of global revenues.
Still, the iSuppli numbers mark steady progress for AMD. On the heels of Intel's release of the first widely available quad-core chips near the end of last year, AMD saw its market share slip nearly five percentage points year-on-year to just 10.9 percent in Q1 of this year. AMD bounced back with an increase to 13.3 percent in Q2 and improved again in the third quarter.
"The combination of strong PC and server demand combined with stable microprocessor prices led to a prosperous quarter for both Intel and AMD," said Matthew Wilkins, principal microprocessor analyst at iSuppli, in a statement.
"Pricing trends were influenced by many variables, including the consistent strength in computing markets, Intel's rapid migration to its new Core 2 architecture microprocessors, and the increasing penetration of multi-core products in the market," Wilkins said.
According to iSuppli, 68.1 million PC units, including desktops, notebooks and entry-level servers, were shipped globally in the third quarter, up 13.8 percent from 59.9 million Q3 2006, and up 11.1 percent from 61.3 million in Q2 2007.
The research organization's final revenue ranking of global general-purpose microprocessor suppliers accounts for sales of all types of general-purpose microprocessors, including RISC chips as well as the PC-oriented x86 devices sold by Intel and AMD.