Intel’s weakened performance in the server market has allowed AMD to make notable progress, though a considerable market share gap remains.
In a challenging second quarter, AMD managed to slightly narrow its gap with Intel in the server market and other segments, even though the difference in market share remains significant.
Data from Mercury Research indicates that processor shipments during the second quarter dropped both sequentially and below typical seasonal patterns. During this period, Intel’s share of the x86 CPU market increased from 73.9% to 75.4%, while AMD’s share decreased from 26.1% to 24.6%.
However, these numbers require context. They reflect the overall market, including AMD’s semi-custom SoCs, which power Microsoft’s Xbox and Sony’s PlayStation 5. Given that these consoles have been available for four years, a decline in sales is expected.
When breaking down specific segments, AMD shows growth. In the server market, AMD’s share rose to 24.1% in Q2 2024, up from 23.6% in Q1 and significantly higher than the 18.9% share held in Q2 2023.
Meanwhile, Intel’s server CPU share dipped to 75.9%, down from 76.4% last quarter and a noticeable drop from the 81.4% share it held a year ago.
However, it’s important to consider the nuances in these figures. The year-ago quarter was affected by inventory adjustments, making direct comparisons less reliable, as highlighted by Dean McCarron, president of Mercury Research.
“The inventory issues were largely resolved by Q3 2023, so the current results better represent actual CPU sales. By Q3 2024, comparisons should be more accurate – but year-on-year comparisons right now remain skewed,” McCarron explained in his report.
“After a year of inventory corrections, current figures likely reflect genuine demand and market share trends, rather than inventory fluctuations. There’s less excess inventory now, so what we’re seeing is actual customer buying behavior. For Intel, that means fewer sales compared to last year, while AMD has seen an uptick,” he added in an email.
An interesting detail emerges in Intel’s decline. As the market has shifted towards CPUs with higher core counts – some reaching up to 64 cores – fewer chips are needed. For instance, a two-socket server with 32-core CPUs can replace four servers using 16-core CPUs, leading to fewer servers being purchased overall. Enterprises seem to prefer fewer, high-core-count servers over more low-core-count ones.
“Intel, which dominates the lower-core-count segment, is losing more from a unit perspective as the market transitions than AMD. AMD is benefiting from the shift towards higher core counts, while Intel is facing challenges in replacing its older, lower-core-count products. This shift is having a more negative impact on Intel’s unit shipments and market share compared to AMD,” McCarron concluded.
