El Segundo (CA) – Each chip maker has basically the same business model, which is to sell more chips every day. And at least in this discipline, Intel showed its rivals how this business worked in 2008. Thanks to its Atom processor, the company earned a huge jump in market share during the year, while AMD lost nearly 25% of its 2007 share, according to iSuppli.
Anyone in the microprocessor industry has to give Intel props for having the right product in the market at the right time. Atom was right there when the netbook segment became popular and no other company was able to cash in on this trend as much as Intel. The processor shifted Intel’s product mix to the lower end and impacted the firm’s revenue, due the lower prices of the CPU. However, since it is generally believed that Intel is able to produce Atom processors for less than $6 per piece, there is lots of profit margin in this product.
The success of the processor boosted Intel’s Q4 2008 microprocessor market share (including x86, RISC and other types of processors) by 3.4 points year over year to 81.8%, iSuppli said. AMD lost 3.5 points to 10.6% in the same time frame. It was one of the most dramatic market share losses for AMD, accounting for nearly 25% of its 2007 share of 14.1%.
For the entire year, Intel’s share was 80.5% and AMD’s share was 12.0%. Despite Intel’s dominance, iSuppli believes that AMD will have a shot at gaining back some share in 2009 because of its 45 nm ramp. 2008 was the third consecutive year that the collective market shares of Intel and AMD have increased. Their combined share rose to 92.5% in 2008, up from 90.9% in 2006.
“Clearly things are getting tougher if you’re a microprocessor supplier and your name is not Intel or AMD,” iSuppli analyst Matthew Wilkins said.