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Wednesday, October 18, 2006

Intel Declares Truce, Waits For AMD To Surrender

Stocks: (AMD)(INTC)

Part of Intel’s earnings reports was the news that its price war with AMD seemed to be over.

The problem with the statement is that Intel also said it was gaining back share from AMD, especially in the high end server markets where AMD had made considerable in-roads.

But, what if someone forgot to tell AMD.

AMD has gained share from Intel, especially in the server market In August, AMD even said that it would eventually have 40% of the market for server chips. It has just north of 20% now.

And, Intel’s new Core 2 Duo has been well reviewed and may be beginning to beat back the advances made by AMD.

AMD may not have a lot of options to keep its market share growing. It is much smaller than Intel and if it does not protect its gains, Intel’s new chipset may set AMD’s growth back several years.

The market has become skeptical about whether AMD’s gains are permanent. Its shares have dropped nearly 20% over the last six months while Intel’s are up about 10%.

AMD may not want to go quiet into that good night.

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

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