AMD has reported a record-breaking third quarter, up 23 per cent over the same period last year, and 21 per cent up from the previous quarter.

In the quarterly-results-driven frenzy of Wall Street, these are top marks for the world's second-string PC and server chip maker - even if, a day later (yesterday), according to Bloomberg, its shares fell 9.8 per cent following concerns that AMD's profitability wasn't keeping up with its sales gains.

AMD attributed its results to increased sales of laptop and server chips, areas where until very recently, it's stolen the march over Intel. AMD launched its 64-bit Opteron chips a year or more ahead of Intel's launch of its 64-bit Xeons, and remained ahead as it started shipping dual-core versions of the product in April. Intel's dual-core 64-bit Xeons only started shipping this month.

There have been some bumps along the journey too, with Intel having claimed a year ago that it invented the dual 64-bit extension technology that allows the same chip to run both 32 and 64-bit code. The foundations were laid during preliminary design work done when the Itanium was first mooted, back in 1995, according to Ron Curry, director of technology marketing.

Intel also claimed that AMD had piggybacked on its work, although support for AMD came last year from none other than Microsoft, whose senior VP Bob Muglia said that AMD had outstripped Intel and that it led the way.

Intel may have been a victim of its own size however, as Abhi Talwalkar, general manager of Intel's Enterprise Platform Group admitted last year. The company was bounced into bringing forward its plans for 64-bit Xeons by AMD's competitiveness in the x86 server space. The result was slower sales of its flagship Itanium, as the cheaper chips proved more of an attractive proposition for compute-intensive applications. "I would be remiss to say that the impact was zero, but I would say that the impact was mainly noise and perhaps confusion. I think it has set us back several months," said Talwalkar.

Intel is on more solid ground than it was a year ago: it now has product in the market that matches AMD's, and its momentum with OEMs is likely to carry it far. However, being behind the curve is not a position to which the Santa Clara giant, which invented the microprocessor, is accustomed. You can expect a raft of new chips, each segmenting the processor market even further, over the next 18 months as Intel bids to redress the balance.