In a subdued second quarter, AMD managed to close the gap slightly with Intel in the server sector and other areas, though the market share difference remains notable.
Mercury Research reports that processor shipments for the quarter fell both sequentially and compared to typical seasonal patterns. During this period, Intel’s portion of the overall x86 CPU market increased from 73.9% to 75.4%, while AMD’s decreased from 26.1% to 24.6%.
However, it should be noted that these figures encompass the total market share, including AMD’s semi-custom SoC units found in Microsoft’s Xbox and Sony’s PlayStation 5, which have both been available for four years and are witnessing a natural decline in sales.
When examining specific markets, AMD shows growth. In the server market, AMD’s share rose to 24.1% from 23.6% in Q1 2024 and made a considerable leap from 18.9% in Q2 2023.
Intel currently holds a 75.9% share in the server CPU market, slightly less than the 76.4% from the previous quarter and significantly lower than the 81.4% from the same period last year.
However, it’s important to consider specific nuances. The year-ago quarter was affected by inventory adjustments, making the direct comparisons somewhat skewed, indicates Dean McCarron, president of Mercury.
“Most of the inventory issues had been resolved by the third quarter of 2023, rendering the data from that period a more accurate indicator of actual product movement. By the third quarter of 2024, comparisons should be reliable. However, the year-on-year figures remain misleading,” he detailed in his analysis.
“The recent quarter likely reflects true market demand and competitive positioning more accurately, since previous inventory surpluses no longer distort Intel’s figures. Currently, consumers are gravitating towards fewer Intel units compared to last year, while interest in AMD’s offerings has increased,” he explained in an email.
There’s a notable detail in the downturn of Intel’s fortunes as the industry trends towards CPUs with higher core counts – some boasting up to 64 cores per chip. This advancement means that fewer CPUs are needed overall. For example, a server with two 32-core processors performs the task of what four 16-core processors used to accomplish, leading to a reduction in the number of servers required. Generally, businesses prefer having fewer servers with higher core counts rather than many servers with lower core counts.
“Intel, holding the largest market share and consequently, the greatest volume of sales in low-core-count units, stands to lose more from a unit shipment perspective as the trend shifts compared to AMD. AMD is benefiting from the growth associated with high-core-count chips. While Intel is also adding new high-core-count products, it is phasing out older models and the transition does not result in equivalent replacement. Thus, the shift toward higher core counts negatively impacts Intel more in terms of both unit sales and market share than it does AMD,” he explained.
Just another piece of unfortunate news for Intel, a company that has experienced its fair share of challenges recently.
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