AMD Chief Executive Lowers Market Share Guidance

by Anton Shilov
10/11/2005 | 08:38 AM

Advanced Micro Devices’ chief executive said in a recent interview that he expected the company to be able to product a hundred million processors per year in three – four years from now. He indicated that this would help AMD to account for 25% - 30% of the market, which is lower compared to what Mr. Ruiz said earlier. Still, such estimations are very brief.

“We will have in Germany, in that one site alone, the capability in the 2008 or 2009 timeframe of building 100 million processors [a year]. That puts you in a 25% to 30% kind of market potential. We plan to do everything we can to fill it up,” Hector Ruiz said in an interview with InformationWeek web-site.

In early Summer, 2005, Mr. Ruiz told the same web-site that there was “no reason why [AMD] shouldn’t aspire be a third of the market in the next two or three years”, which might, possibly, indicate that the company was more optimistic about its market share growth and manufacturing capabilities back then. In March, however, Mr. Ruiz indicated that one of the chipmaker’s market share targets was 25%, without giving any timeframes, though.

In the Q2 2005 Intel Corp., AMD’s main rival, commanded 82.3% shipments of x86 processors, AMD supplied of 16.2% such chips, whereas the rest 1.5% of microprocessors were shipped by Transmeta Corp. and VIA Technologies. By contrast, in the first quarter of the year AMD’s market share was 16.9%, Intel’s share was 81.7%, according to Mercury Research.

Market share of AMD has been going up gradually since 2003, after the company managed to offer high-performance desktop processors which could beat Intel’s Pentium 4 chips in certain applications and offer 64-bit functionality, something Intel did not provide. Later on, the company managed to begin revenue shipments of its dual-core processors for servers months earlier than Intel, which allowed the company to surpass 10% market share barrier in the server market, according to Mercury Research.

Currently AMD can produce up to 20 000 200mm wafers per month at its Fab 30 facility in Dresden, Germany. Once AMD launches its Fab 36, located adjacent to the Fab 30, it will be able to manufacture up to 13 000 300mm wafers, which is equivalent to about 29 250 200mm wafers. Furthermore, AMD is working with third-party chipmakers, primarily with Chartered Semiconductor, who use similar process technologies co-developed by IBM, to outsource part of microprocessor production to them. AMD Fab 36 is expected to be in volume production in 2006.