Intel Still Dominating x86 Processor Market, Report Finds

Intel continues to dominate the market for x86 processors, with the chip giant controlling about 80 percent of this global market in the third quarter, according to a Nov. 3 report from Mercury Research.

In the third quarter, Intel accounted for 81.5 percent of the world’s x86 chip market. Advanced Micro Devices finished well behind its larger rival, controlling 17.8 percent of the market, according to Mercury. Via, which just announced a new line of Nano 3000 processors, came in a distant third, controlling less than 1 percent of the global x86 market.

Overall, the worldwide x86 market was up more than 17 percent in the third quarter compared with the second quarter, wrote Dean McCarron, an analyst with Mercury. The market was helped by shipments of mobile processors for laptops and mininotebooks or netbooks. Mobile CPU shipments increased about 22 percent year over year.

However, the Mercury report said shipments of desktop and server x86 chip were down year over year, which seems to show that while consumers might start spending on notebooks this holiday season, businesses are still holding back on making hardware IT purchases.

“All evidence at the moment suggests the high level of CPU shipments is due to actual OEM demand and there is no significant component inventory building taking place,” McCarron wrote in the report. “This does not, however, preclude an inventory build in finished systems from occurring in the fourth quarter if demand fails to materialize.”

The Semiconductor Industry Association on Nov. 2 reported that global semiconductor sales, which include x86 and other types of chips, topped $61 billion for the third quarter. The same report showed that demand is being driven in part by PC sales, specifically sales of laptops and netbooks.

The latest Mercury report shows that Intel has managed to keep its dominant place in the x86 market. Intel’s third-quarter market share of 81.5 percent hardly differed from the previous quarter, when Intel held 80.5 percent market share, or from the third quarter of 2008, when its market share was 81.2 percent.

However, Intel’s dominance in the x86 CPU marketplace has not come without scrutiny. Earlier in 2009, the European Commission–the antitrust watchdog of the European Union–fined Intel more than $1 billion for anticompetitive practices. On Nov. 4, New York Attorney General Andrew Cuomo filed a lawsuit against Intel that accused the company of squashing competition in the x86 chip market.

Intel denies that it engages in anticompetitive practices in the United States and overseas.

On the other side, AMD has also held steady but has not made the significant gains in the market that it once did. In the second quarter, AMD’s market share hit 18.7 percent and its market share in the third quarter of 2008 stood at 17.7 percent.

For its part, AMD has been Intel’s main accuser, claiming that Intel uses its dominant market share to push away competition and force computer makers and resellers to sell PCs that use Intel chips.