Intel Extends Microprocessor Lead Even as Atom Bombs

Paul Lilly

How do you chip away at a giant who keeps getting bigger no matter what the circumstances? AMD would pay good money for an answer, as chip giant Intel yet again increased its share of the microprocessor market, and did so even as the demand for netbooks fell significantly. Netbooks, as you know, are almost entirely powered by Intel's Atom processors, and that served Intel well from 2008 to 2010 when the netbook market enjoyed double-digit growth.

As media tablets became all the rage, netbooks took a downward turn in 2011, and as a result Intel's Atom processor and chipset revenue in the third quarter fell 32 percent compared to last year, according to IHS iSuppli . Things are only going to get worse. IHS iSupply predicts global netbook shipments will fall to 21.4 million units in 2011, down from 33.5 million in 2010.

Big whup. Even as Intel's Atom processor bombed (comparatively), the Santa Clara chip maker still managed to grow its global microprocessor market share by 1.2 percentage points in the third quarter of 2011 to 83.69 percent. Meanwhile, AMD's shared dropped 0.3 percent to 10.22 percent, and all other chip makers combined slid backwards 0.9 percent to a 6.1 percent share of the market.

How did Intel do it? By focusing on microprocessor sales to data centers and cloud computing projects.

"The boom in media tablet sales has packed both upsides and downsides for Intel—hurting its business in netbook microprocessors—but boosting its sales of chips used in data centers to support cloud computing," said Matthew Wilkins, principal analyst for compute platforms research at IHS. "Because of its broad product line that addresses both the consumer and business side of the microprocessor business, Intel in the third quarter managed to outperform the overall market. Even with the company warning that its fourth-quarter revenue will fall short of expectations, the company still is expected to expand its lead in the global semiconductor market based on its strong performance in the third quarter and the rest of the year."

AMD has Bulldozer, but it really needs is a rock of some sort if it's going to take down the Goliath known as Intel.

Image Credit: Uew Hermann ( www.hermann.uwe.de )

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