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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.


Edwards, Cliff. "Suddenly, It’s AMD Inside". Business Week, September, 20, 2004.

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