Intel and AMD Swap Market Share as CPU Sales Remain Sluggish

 The PC market is experiencing an economic hangover following the COVID-19 pandemic. Sales are down for everyone involved, and both Intel and AMD have been hit particularly hard. Gamers and creators have been putting off upgrading their PCs, and companies have been considering expansion due to various economic concerns. New reports from industry analysts shed light on how the recent downturn has affected the CPU market. Intel continues to take market share away from AMD in the desktop and notebook space, and AMD is taking a bigger slice of Intel's data center pie.

The reports highlight the struggles both companies have faced in the past few quarters, which have been historically brutal. Intel posted its biggest quarterly loss ever in Q1, and it was also reported that AMD is struggling to get its new Zen 4 processors off the ground, as evidenced by recent price cuts despite these being relatively new processors. However, AMD has some built-in resilience with its embedded and data center products that have helped it weather the recent turbulence.

Despite its struggles, Intel remains a dominant force in the client and data center space and owns the lion's share of the markets where AMD competes. All the cries of "RIP Intel" are sorely misguided given its size and market position. Semiconductor industry analyst Sravan Kundojjala (via TechPowerUp ) notes that both Intel and AMD suffered significant year-over-year losses at the end of the first quarter, but that Intel was nonetheless able to regain some of AMD's client market share. Currently, Intel still controls almost 80% of the laptop and desktop market.

In the data center, fortunes are reversed, with AMD reportedly taking 10% of the market from Intel over the past year, according to Counterpoint research. However, Intel still commands over 70% of the data center market, with AMD now holding nearly 20%. AMD famously beat Intel to market with its 4th generation Epyc "Genoa" CPU, which launched in November 2022. Intel repeatedly delayed its 4th generation Scalable Sapphire Rapids CPUs, but finally announced them in January 2023.

The PC market is expected to pick up in the second half of 2023 as existing inventory dries up after several quarters of supply outstripping demand. Companies also hold back inventory to protect their prices. This is expected to moderate as the market begins to show renewed strength, which is expected to extend into 2024 as the upgrade cycle begins again. Analysts believe that by next year, all hardware purchased in 2020, when the pandemic began, will need to be replaced, and a new version of Windows is also expected.