AMD is doing better than ever before and, if it gets lucky, it might even start to make serious headway into Intel's market share, with the consequence that competition should start to force prices down.
Reports from number cruncher IDC this week show that its share of the overall x86 CPU market have jumped from 8.5 per cent last quarter to 9.9 per cent in the last three months. And it's the company's server products that are leading this charge into Intel's heartland, with the growth from last quarter to this one leaping from 6.9 per cent to eight per cent. By comparison, AMD's desktop chip share rose by less than a percentage point.
The next few months will see interesting times, though. As we reported recently, AMD's roadmap shows the company has decided to kill off the Athlon XP chip but seems not to have replacements lined up for the Opteron or multi-processor Athlon until the second half of 2005.
AMD's Opteron is the chip which blazed a 64-bit trail into the server market, well ahead of Intel. At the time, its Xeon was firmly stuck in 32-bit land. Intel appears consequently to have been forced into launching its Xeon with 64-bit extensions - aka EM64T - and codenamed Nocona, months ahead of its original plans. It now looks like that product will have to soldier on for the next six months at least until a raft of new dual core products appear.
Now EM64T is here, Intel's incentive to succeed in the lower-end server business will be just as strong as ever, especially since it's doing much less well at the high end than expected. European marketing manager Alan Priestley admitted as much earlier this year when he ruefully explained that Itanium was taking only around five per cent of the market, against competition from RISC vendors such as HP and market leader IBM. However, this may cease to become a problem for Intel by 2007 when, as Priestley explained in July 2004, Intel expects the Xeon and Itanium lines to be in a common socket., helping to bring down OEMs' system building costs. Some have speculate that this could even presage the demise of Xeon altogether.
In the short-to-medium term however, Intel needs EM64T to put pressure on AMD. The good news if you're buying server technology is that it does not so far seem to have dented AMD's sales figures - quite the opposite.
It needs only Dell to bring AMD in as a technology partner to help it ship low-cost but high performance servers, and Intel really will have a fight on its hands.