AMD nibbles market share on server chips

AMD nibbles market share on server chips

AMD took nearly two points of volume market share from Intel in the server chip segment in the first quarter of 2021. This gain and its overall focus on selling higher-end chips allow the manufacturer to amortize the market. the financial impact of a less enviable situation on the desktops and notebooks segments.

At first glance, the first quarter of 2021 was not a good time for AMD. According to Mercury Research, its volume share of the overall market for X86 processors has indeed fallen (-1 point to 20.7%) year on year in favor that of Intel products. This regression can be explained by a decline in its positions in the field of CPUs for notebooks (-1 point at 18%) and stability (19.3%) of those it occupies in that of components for desktops. But at the same time, the weight of its quarterly sales on the segment of server chips in the Epyc range reached an importance (+1.8 point to 8.9%) that it had not known since 2006. The company managed by Lisa Su has therefore drawn very substantial income.

Significant increase in average selling price at AMD

To make matters worse, the manufacturer’s situation in other segments of the processor market may not have had such a negative impact on its billings. AMD has, in fact, chosen to focus on the marketing of products generating more margin. “During this quarter, AMD shipped fewer entry-level processors and more high-end components, as well as higher volumes of server CPUs. The average selling price of its products has therefore increased significantly, ”said Dean McCarron, president of Mercury Research.

This strategy chosen by AMD has been implemented in a global processor market which has recorded impressive growth (+ 41% between January and March). The first quarter of 2021 was the second most important in history in terms of volumes sold. The most prosperous was none other than the previous quarter. The situation has benefited AMD and of course Intel, the main player in the duopoly that reigns in the X86 server market. The first, however, suffers more than the second from a context that for several months has been mixing supply difficulties and strong customer demand. In the fourth quarter of 2020, this resulted for the first time in three years in a simultaneous decline in AMD’s market share in the desktops and notebooks segments.

Intel Rocket Lake chips are a game-changer on the desktop

However, this stabilization of AMD’s positions in the desktop market may only be momentary. Last March, Intel delivered its Rocket Lake processors which offer a particularly interesting alternative to AMD’s Ryzen 5000 on the entry-level, where the largest purchase volumes are logically made. In addition, the latest chips enjoy high availability at a very competitive price. Conversely, competing products offered by AMD are still rare and are marketed at a price far from the selling price suggested by the manufacturer. The new Rocket Lake chip deal promises an interesting match between Intel and AMD in the second quarter.

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