AMD continues to gain ground on Intel

In a soft second quarter, AMD was able to gain a little more ground on Intel in the server business and elsewhere, although the gap in market share remains fairly sizable.

According to Mercury Research, second-quarter processor shipments were down sequentially and lower than normal seasonal trends. For the quarter, Intel’s share of the overall x86 CPU market grew sequentially from 73.9% to 75.4%, while AMD’s slipped from 26.1% to 24.6%.

But that comes with a big caveat. Those figures represent the overall share of the market, which includes AMD’s semi-custom SoC hardware used in both Microsoft’s Xbox and Sony’s PlayStation 5 consoles, both of which have been on the market for four years, so sales are understandably slowing.

If you break it down by markets, AMD is actually growing. In the server space, AMD was up to 24.1% of the market compared to the 23.6% share it held in Q1 2024 and a significant jump over the 18.9% share it held in Q2 2023.

Intel, on the other hand, is at 75.9% share of server CPUs, a step down from the 76.4% it held last quarter and a notable drop from the 81.4% share it held a year ago.

However, the devil is in the details. Because the year-ago quarter remained impacted by inventory correction efforts, a comparison between the prior year quarter and the current quarter is not entirely fair, notes Dean McCarron, president of Mercury.

“The corrections were largely resolved by the third quarter of 2023, so current-quarter share results are probably in line with actual CPU sell-in, and by the third quarter of 2024 most comparisons should be valid – but the on-year results certainly aren’t,” he wrote in his report.

“After a year of inventory burn, the current quarter results probably are more reflective of actual demand and market share, rather than inventory changes –  there’s not as much inventory left around to suppress Intel’s sales, so what we’re seeing is what the CPU customers are really buying, and for Intel they’re buying fewer units than what it was a year ago, and for AMD they’re buying more,” he added via email.

And there is some interesting nuance in the Intel decline. As the market has shifted to higher core count chips –  up to 64 cores in one CPU –  fewer chips are being sold. A two-socket server with 32-core chips can do the work of four 16-core chips, which translates into fewer servers. It seems enterprises would rather have fewer physical servers with high core counts than many physical servers with low core counts.

“Intel, which has the majority share and thus the highest volume of lower-core-count units, had more to lose from a unit shipment perspective as the market converts than AMD does – AMD is essentially growing with the high core count movement, and while Intel’s new products are as well, it’s losing older products and it’s not a 1:1 replacement so the migration to high core count is more unit and market share negative to Intel than it is to AMD,” he said.

Just another bit of bad news for Intel, which has had a lot lately.

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