Intel AMD
Chip Market
Battle for microprocessor market
The battle between Intel Corp. and AMD in the microprocessor market
is fierce. For years Intel has been the leading force and has had
major market share in the microprocessor industry. In the low-end
server and corporate pc markets Intel still has a strong grasp for
now. AMD, however, is coming on strong in the consumer pc market.
They boast of acquiring 50% of the retail sales of personal computers,
and they have unexpectedly gained 7% of the low-end server market.
This number is up from almost nothing just a few years ago. AMD
does not plan to give up soon on the chase either. The company has
ambitious goals for the near future. They plan to grab 10% of the
low-end server market by the end of the year. They also hope to
have 30% of the corporate pc market within five years. Some of AMD’s
success has come because of Intel’s mishaps. Intel planned
to release a 64-bit processor in 2001 that would be a huge hit.
It however was a flop, because very little software had the ability
to run the faster processor. Instead AMD countered the release with
a processor that could run in both 64-bit mode and could also handle
the industry standard 32-bit software. So AMD has had some success
in taking advantage of Intel’s missteps. One of the number
one reasons why AMD will have problems catching Intel is because
of Dell. Intel chips are in 100% of Dell’s computers. Dell
is constantly evaluating suppliers but they haven’t made any
deals with anybody but Intel for microprocessors.
The demand in the microprocessor industry between AMD and Intel
is very high. What once was a monopoly is now a duopoly. The demand
conditions are perfect for triumphant businesses. The size of the
market is huge. AMD plans to make a microprocessor that will be
cheap so they can sell to India and China. They forecast that 50%
of human beings will have access to the internet by 2015. The sophistication
of consumers is very high, considering that they are in the high
tech industry of microprocessors. The media exposure to the microprocessors
is huge, considering almost every computer advertisement makes reference
to the processor that is running the machine. Both companies’
strategies are basically to out compete one another. This is a great
thing for everyone. Consumers win because prices become lower, and
the technology gets better with competition. It is not your average
competition. When these companies make a move it is to purposely
take blows at the component. The related and supporting industries
are clustered near AMD in the Silicon Valley where they have their
headquarters. This provides the company access to all of their suppliers
and interaction with similar companies. The foundation for these
booming companies is laid, and we can all sit back and watch them
duke it out in the next five years. Only time will tell who will
prevail as the largest microprocessor producer.
Citation
Edwards, Cliff. "Suddenly, It’s AMD Inside". Business
Week, September, 20, 2004.
pp.32-35.
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