AMD is now within striking distance of claiming a third of the CPU market, as the company benefited from inventory corrections and price increases by rival Intel, according to the latest data from Mercury Research. The gain in share also came as the processor market as a whole suffered the largest quarterly and annual declines in the market research firm's 30 years of tracking such data.
"While Mercury wasn't tracking the market during the 1985-1986 PC downturn, the market revenue decline for 2022 was worse than Intel's results for either of those years, likely making the current processor downturn the worst in PC market history on both a unit and revenue basis," Mercury Research said.
It's all relative, of course, and people are still buying PCs even if at a reduced clip. Not including ARM hardware, unit shipments in 2022 tallied 374 million with $65 billion in collective revenues. Those numbers represent declines of 21 percent and 19 percent, respectively.
"While this appears very gloomy, note that overall processor market revenue was still higher in 2022 than any year ever with the exception of 2020 and 2021," Mercury Research pointed out in its report.
According to the report, the bulk of the downturn in shipments can be attributed to excess inventory shipments in the previous quarters. As a result, CPU suppliers are "deliberately limiting shipments" to clean out existing stock. It's a challenge for suppliers because they're also contending with lower demand for PC processors and weakening macroeconomic concerns, according to the report.
"Desktop processor shipments were down significantly after the large boost in the third quarter. This is likely due to Intel's price increases driving pull-in of sales into the third quarter followed by a steep decline in the fourth quarter. While both Intel and AMD saw much lower desktop CPU shipments, Intel's fell significantly more resulting in AMD gaining share in a shrinking market," Mercury Research said.
The market research firm caveats that this is more reflective of Intel's inventory position rather than end user demand. Additionally, some of AMD's market share gains came from IoT and semi-custom products, the latter of which takes into account chips in game consoles like the PlayStation 5 and Xbox Series X|S.
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https://i.ibb.co/QCbFBCn/amd-cpus.jpgEven factoring all that in, Mercury Research says the totality of AMD's rise in market share (5.7 points last year) "is probably legitimate share gains rather than inventory movement." It's a bit of a mixed message, but the end result is that AMD's overall x86 CPU share at the end of 2022 climbed to 31.3 percent, up from 28.5 percent in the previous quarter and 25.6 percent at end of 2021.
This came entirely at the expense of Intel, which still dominates the market with a 68.7 percent share, though that's down from 74.5 percent from a year ago.
There's a wider gap and less movement if looking at the lucrative server market. Intel still dominates there as well, accounting for 82.4 percent of all server CPUs at the end of 2022. That's virtually unchanged from the previous quarter (82.5 percent), albeit down from 89.3 percent at the end of 2021.
That left AMD with a 17.6 percent share of the market, versus 17.5 percent the third quarter of 2022 and 10.7 percent from the previous year.
https://hothardware.com/news/amd-steals-intels-lunch-money-increasing-cpu-market-share....
Not many know intel was in dire straits prior to the development of its core cpu technology. The pentium 4 processor was an evolutionary dead end. Intel had no product and no answer to how it would continue its market dominance. Intels breakthrough came from its israeli division who modified pentium 3 processors to create the core line of intel CPUs, which would succeed the pentium 4.
Now it appears intel may have fallen once again into a developmental rut. AMD is slowly but steadily stripping away market share as its benchmark stats in 2023 appear to gain the upper hand.
While this does not imply any significant shift will occur in market share for a span of years. Brand name recognition and loyalty being what they are, most consumers simply buy what they know. Rather than engage in comparison shopping.
Over the long term however, they say that history repeats itself. Is it possible that intel will once again paint itself into a developmental dead end which will be difficult to dig itself out of, as occurred in past years with the pentium 4?
Also for those searching for long term stock buys, is it possible that AMD could be a prospect for eventually gaining majority market share in the 80x86 semiconductor industry?
