Intel, AMD gather steam as chip price war cools

July 2, 2008 (Computerworld) Intel Corp. and Advanced Micro Devices Inc. both gained momentum in the first quarter of this year as the longtime price war between the rival chip makers slowed.

This week, iSuppli Corp. reported that average selling prices for both AMD and Intel wares held steady between the fourth quarter of 2007 and the first quarter of 2008. "This price stability is another indication that price pressure has decreased and the price war between the two microprocessor suppliers has abated," reported iSuppli.

The research firm also noted that both companies showed some slips in the first quarter but registered enough gains to put them on the plus side of growth charts.

"Intel was the short-term winner in the first-quarter microprocessor market," said Matthew Wilkins, an analyst at iSuppli, in a statement. "AMD's PC microprocessor product portfolio has become much stronger during the last year, particularly on the desktop side. Customers clearly are responding to AMD's moves. At the beginning of the year, we saw AMD add the quad-core Phenom microprocessors to its desktop portfolio, which it has since built on with tricore and dual-core flavors, for the prosumer and business markets."

Wilkins also noted that about half of AMD's long-term growth came at Intel's expense. The remainder came out of smaller suppliers' market share.

According to iSuppli, Intel accounted for 79.7% of global microprocessor revenue in the first quarter of this year. That's up 1.2% from the fourth quarter of last year. However, compared to the first quarter of last year, Intel's revenue market share actually is down by 0.7%.

On the other side of the rivalry, AMD's first-quarter global revenue market share of 13% was down from the fourth quarter in 2007 when it came in at 14.1%, iSuppli reported. But AMD did increase its year-over-year revenue market share in the first quarter by 2.2%.