Thursday, November 29, 2007

AMD's Struggles Knock It Off Top 10 Chip-Maker List

After a year of financial and market struggles, Advanced Micro Devices Inc. has fallen off iSuppli Corp.'s latest listing of the world's top 10 chip manufacturers.

The company that not so long ago was battering rival Intel Corp.'s flagging market and mindshare, continues to take it on the chin. Dale Ford, a vice president at market research firm iSuppli Corp., said AMD's sagging numbers in the first and second quarter of this year left the company in their number 11 spot.

"Relative to Intel, there's a little bit of a pick up from Q1, but you couldn't say there's real momentum," said Ford. "The first and second quarters of this year were really rough for them. The third quarter was a very nice quarter for them, but in a year-over-year comparison, they're still not where they were."

Intel, on the other hand, continues to dominate the semiconductor industry, according to iSuppli's numbers. The firm's latest report shows that Intel's chip revenue is expected to rise 7.7% in 2007 to hit $33.97 billion in 2007. That's up from $31.5 billion in 2006. Comparatively, AMD's sales are expected to decline by 22.7% for the year.

The company did not disclose the full Top 10 list.

The semiconductor industry can be a tough one to pin down, though. Earlier this month, IC Insights Inc., a Scottsdale, Ariz.-based research firm, for the first time put AMD on its top 10 list of worldwide chip suppliers. At the time, IC Insights Vice President Trevor Yancey called AMD's move onto the list a "big shakeup."

AMD makes it on one list and falls off another - all within a month. Where does the company really stand in the industry?

Ford said the discrepancy lies in the fact that IC Insights focused on AMD's third-quarter performance, while iSuppli is comparing the companies on a year-over-year basis. In the third quarter of 2006, AMD hit its highest market share with 16.8% of global microprocessor sales. In the first quarter of this year, that number had dropped to 10.9%. iSuppli is estimating that AMD will climb to 14.2% market share for Q4 this year, but that still has the company trailing where it was a year ago.

When AMD grabbed some footing in the semiconductor market early in the decade, Intel stumbled under the competition and struggled between 2003 and 2005. Intel responded last year, though, with a reorganization that included selling off several divisions and updating product lines, curbing AMD's momentum and allowing Intel to grab back some of its lost market share.

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