Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Tuesday, August 01, 2006

Intel's New Chips Show Up Late

Stocks: (INTC)(AMD)

According to data from Mercury Research, AMD's share of chips shipped in the second quarter rose to 25.8% in the second quarter from 22.1% in Q1. And, AMD has just announced that it picked up IBM server business in addition to its success with Dell several weeks ago.

Wall St. wisdom had it that with new dual core chips coming out shortly and the "Woodcrest" upgrade to Intel's Xeon processor, AMD was on the ropes. But, it appears that it's not so.

AMD's Opteron processor is still the choice of a number of companies that think its high-end processor is superior to Intel's. And, with the new Intel products moving into the market in a month or two, the Opteron may have legs for another quarter or two.

Both Intel and AMD have been beaten down by the market due to falling PC prices, slowing PC sales and price competition between the two to gain share. Intel's larger revenue and stronger balance sheet have been viewed as assets in the chip industry's equivalent of the Thirty Years War.

The IBM and Dell decisions swing some of the momentum to AMD. The company still trades at $19.39, not far above its 52-week low of $16.90. Intel trades at $18, barely above its 12-month low of $16.75.

Intel's new chip introductions seemed to throw the momentum to them. The new Core 2 Dual has been well-reviewed, but market share is the critical scorecard for both Intel and AMD, and the edge is with the smaller company now.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

Powered by Blogger