Competition in the x86 processor market between AMD and Intel remains fierce. While Intel gained some share in the IoT market, AMD continued to dominate in all other segments. In the first quarter of the year, x86 processor shipments followed typical seasonal trends, with all segments experiencing a moderate decline. However, market results have returned to normalcy for the first time since the COVID pandemic began.
AMD’s Challenges in SoC Shipments:
AMD faced challenges in its SoC shipments due to decreased console demand. Gaming revenue dropped significantly in Q1 compared to the previous year. As older consoles sell in smaller numbers, AMD expects a decline in Q2 and the second half of 2024. These challenges impacted AMD’s SoC business, leading to Intel gaining share.
Inventory Corrections Impacting Sales Share:
The year-ago quarter was still affected by inventory correction efforts, making the statistics and share movements reported in recent quarters more reflective of suppliers’ inventory corrections rather than actual sales-out share. However, these corrections were largely resolved by the third quarter of 2023, and current-quarter share results are likely in line with actual CPU sell-in.
AMD’s Overall Share Advantage:
Excluding IoT and semi-custom products, AMD continued to gain share in both the client and server segments. While both Intel and AMD saw lower shipments on-quarter, AMD’s declines were relatively smaller, resulting in overall share gains for the company.
Intel’s Mobile Client Share Gain:
Intel gained share in the mobile client segment during Q1. This was attributed to the ramping of Raptor Lake cores. Although Meteor Lake also ramped, it was off a small base from the previous quarter, and the ramp was slower than expected. Packaging capacity limitations affected Meteor Lake’s shipments.
AMD’s Mobile Share Loss:
AMD experienced a decline in mobile shipments, leading to a loss of share. The decline primarily occurred in AMD’s oldest mobile CPU cores. On the other hand, Intel shipped an increasing amount of entry-level processors, offsetting seasonal declines in mainstream CPUs.
Desktop Market Share Dynamics:
In the desktop segment, AMD had nearly flat CPU shipments on-quarter, which is better than typical seasonal trends. Intel, on the other hand, experienced slightly lower declines than usual. AMD’s strong performance in desktop CPUs was due to strong Vermeer core shipments and the ramp of the new Phoenix Point APU. Intel’s Raptor Lake series CPUs ramped strongly but only replaced the prior generation, resulting in no net upside.
Server CPU Market Trends:
The server CPU market faced typical seasonal declines in Q1. While both Intel and AMD experienced declines, AMD’s declines were slightly smaller, leading to a share increase on-quarter. AMD’s share also saw significant growth on-year, with Genoa being the main driver of this growth. Intel’s declines in the server segment were not discussed in detail during their earnings call.
ARM PC CPU Shipments:
ARM PC CPU shipments remained nearly flat on-quarter. Declining shipments of processors into Apple’s Macs were offset by a modest increase in Chromebook CPU shipments. Estimates show that ARM PC client share increased from 10.3% in Q4 to 11.1% in Q1, including Chromebooks and Apple’s M-series based Macs with X86 CPUs.
Limited Visibility into Zhaoxin’s Joint Venture:
It is highly probable that Via’s Zhaoxin joint venture’s share is growing, but there is limited visibility into this small segment of the CPU business.
Conclusion:
The x86 processor market continues to be competitive between AMD and Intel. While Intel gained share in the IoT market, AMD remained dominant in the client and server segments. Inventory corrections impacted sales share in previous quarters, but the market is now returning to normalcy. AMD faced challenges in SoC shipments due to decreased console demand, resulting in a decline in gaming revenue. However, AMD’s overall share advantage persisted, with gains in both client and server segments. Intel gained share in the mobile client segment, while AMD experienced a loss due to declines in its oldest mobile CPU cores. In the desktop segment, AMD’s nearly flat CPU shipments defied typical seasonal trends, resulting in share gains. The server CPU market saw declines for both suppliers, but AMD’s declines were smaller, leading to a share increase. ARM PC CPU shipments remained steady, and Zhaoxin’s joint venture share is likely growing, although limited visibility makes it challenging to determine the exact extent.
