AMD has stolen nearly two percent of the processor market off Intel in the past three months, according to Mercury Research.

Intel shipped 80.8 percent of all desktop, notebook and server processors using the x86 instruction set in the third quarter, said Dean McCarron. AMD's share of that same market was 17.8 percent. Last year, Intel had 82.1 percent of the same market, and AMD 15.9 percent - 1.9 percent less.

AMD gained share in every segment of the market, McCarron said. Its presence in the server market is beginning to pay off and the company also has a notebook processor in its Turion chip that is starting to attract attention. "I don't think this paints a picture of Intel as weak, it's just AMD is considerably stronger than it used to be," McCarron said.

Intel has taken some hits this year on the server side. AMD released a dual-core Opteron processor in April, while Intel's first dual-core server chips did not emerge until last month. Executives from HP and Dell also believe Intel's Xeon chips lag behind AMD's Opteron chips in performance.

AMD's high-water mark in the x86 processor market came in the second quarter of 2001, when the company shipped 21.8 percent of x86 processors. However, that figure was driven largely by desktop processors, whereas the company's current product line-up is much more diverse, McCarron said.