AMD big gainer in Q3 microchip sales —IDC

Daniel Sorid

SAN FRANCISCO: Advanced Micro Devices Inc. captured nearly 10 percent of computer microchip market revenue in the third quarter, the highest level in nearly three years, market research firm IDC said on Tuesday.

The gains show that Sunnyvale, California-based AMD is succeeding with a strategy of making higher-priced chips for servers and premium PCs used by video game enthusiasts, said Shane Rau, an IDC analyst. Rau said the average price of an AMD chip rose 10 percent from the second quarter.

Moving away from its traditional role as a maker of low-priced clones of Intel Corp. chips, AMD has introduced more competitive products like the Opteron server chip and its Athlon 64 FX gaming PC chip that earn it higher profits and revenues.

Opteron, for one, has been widely viewed as a success, even winning the praise of Dell Inc., which sells only Intel-based computers.

AMD trimmed Intel's share in PC-based servers in the third quarter, taking 8 percent of unit sales, up from 6.9 percent, according to IDC. Opteron was introduced by AMD last April.

Meanwhile, AMD's share of the revenue pie rose to 9.9 percent from 8.5 percent in the second quarter. The last time AMD had a higher share of dollar sales of PC microprocessors was in the first quarter of 2002, Rau said.

AMD also saw slight gains in unit share for desktop and notebook PCs. It now has 18.4 percent of the desktop PC market, and 9.3 percent of the notebook PC market, by the number of chips sold, though each are up less than 1 percentage point from the second quarter.

Intel nevertheless held onto its overall dominance of the PC microprocessor market, retaining 81.2 percent of the overall share of units, off slightly from 81.7 percent.

Based on its own targets, AMD still has far to go before it can declare outright success against Intel, which still remains the dominant force in the PC chip market.

AMD's top sales executive said Opteron is on track to achieve 10 percent of the PC server market by the end of the year, and up to 30 percent of that market over time.

"I see no reason why we couldn't capture a third of the server market," Henri Richard, AMD's worldwide head of sales, said at the time, adding that AMD will end 2005 as "a significant player in the enterprise segment."

AMD has said it expects fourth-quarter sales to exceed regular growth patterns for the period, and last week said sales had rebounded in recent weeks after a slowdown around the time of the U.S. presidential election on Nov. 2.