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You are here: Home / Chips & Processors / AMD Losing More Ground Against Intel
AMD Losing More Ground Against Intel
AMD Losing More Ground Against Intel
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
NOVEMBER
28
2007
Move over AMD. Sony and Toshiba have bumped you off the top-10 list -- and Intel remains king of the chipmakers. According to iSuppli's preliminary 2007 global semiconductor market share estimate, Intel is the top of the heap. Intel's chip revenue is expected to rise 7.7 percent in 2007 to reach $33.97 billion, up from $31.5 billion in 2006.

Intel exceeded the overall semiconductor industry growth rate of 4.1 percent in 2007 and massively outperformed its PC microprocessor rival AMD, whose sales are expected to decline by 22.7 percent for the year.

"Throughout most of the year, Intel successfully defended much of the market share that it won from AMD in the first quarter in the PC microprocessor segment due to the success of its lines of dual- and quad-core chips," Dale Ford, vice president of market intelligence for iSuppli, said in a statement. "This represents a major reversal of fortune compared to 2006, when AMD had the advantage with its popular dual-core microprocessors, allowing it to gain share from Intel."

AMD's Woes

Intel's market share rose to 12.5 percent in 2007, up from 12.1 percent in 2006. After rising into the top 10 rankings for the first time ever last year, AMD's revenue decline is expected to cause it to drop back to 11th place in 2007, down from eighth place in 2006. AMD's semiconductor revenue in 2007 is set to fall to $5.8 billion, down from $7.5 billion in 2006.

The root of the issue might be AMD's quad-core bets. AMD took a fundamentally different approach to quad-core development than Intel. While Intel pressed forward into the quad-core market by combining two dual-core chips on a single piece of silicon, AMD focused on developing what it calls a native quad-core.

"Intel got a nearly yearlong jump on the quad-core market when AMD slipped its delivery schedule on the quad-core by a few months. In retrospect, that was probably a significant strategic error," said Charles King, principal analyst at Pund-IT. "AMD is still well positioned. The company has strong partners and a very solid spot in the high-performance computing space with the latest generation Opteron. But 2007 wasn't AMD's year."

Video Game Fortunes

Meanwhile, Sony and Toshiba shined. Sony's semiconductor revenue is expected to rise by 56.8 percent in 2007, by far the highest percentage growth of all the top 20 semiconductor suppliers for the year. In contrast, overall consumer electronics semiconductor revenue is set to increase by only 8.9 percent in 2007. Sony's revenue increase is nearly all due to its sales of chips for the company's PlayStation 3 video game console. Company semiconductor revenue increased to $8 billion in 2007, up from $5.1 billion in 2006.

Toshiba, which supplies semiconductors to Sony for the PlayStation 3, is expected to post a standout performance in semiconductors in 2007 with growth of 24.1 percent, the second-largest percentage increase among the top-20 chipmakers.

"The PlayStation 3-driven performance of these two suppliers is the major factor propelling the world-beating growth of the Japanese semiconductor industry in 2007," Ford observed. "Revenue generated by semiconductor suppliers headquartered in Japan is expected to rise by 11.9 percent in 2007, the largest increase of any region."

With fellow Japanese suppliers Renesas Technology and NEC Electronics expected to post a revenue increase of 3 percent and a decline of 0.8 percent, respectively, iSuppli concluded, it's clear that Sony and Toshiba are the major factors driving growth in Japan's chip industry.

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