AMD acquires share in server market while overall x86 sales take a hit

AMD continues to gain ground in the information center, getting CPU market share from leader Intel regardless of a significant decline in server processor shipments.Overall, the processor market took a hit in the fourth quarter of 2022, as well as for the full year 2022, due to lower demand, ongoing stock corrections, and a slowing economy, according to expert firm Mercury Research.For 2022, total unit deliveries(customer and server

, excluding ARM)were 374 million and incomes was available in at $65 billion, down 21%and 19%, respectively, compared to 2021. Specific to server processors, sales

for the year was available in at 36.1 million units, down 4.2 %from 37.7 million in 2021. Incomes were $24 billion in 2022, down 7.7 %from $26 billion in 2021. Mercury’s primary expert Dean McCarron attributes the sharper drop in revenue versus systems since the typical selling price( ASP)declined.AMD’s total share of the CPU market (leaving out IoT and custom-made silicon)rose from 23.3 %in 2021 to 29.6 %, while Intel’s share fell from 76.7%in 2021 to 70.4% in 2022. In the server market, AMD’s overall market share grew from 10.7%

at the start of 2022 to 17.6 %at the end of the year, while Intel fell from 89.3% at the start of the year to 82.4%. Surprisingly, the server chips that are selling one of the most

aren’t the most recent and biggest designs. Rather, they’re a couple of generations old. It’s once again a reflection of slower turnover in the server market when compared to the customer side.”This is a company where items go into the marketplace and they stay in the market for a truly long time,” McCarron stated.”With AMD, it took a truly long period of time for their share to start climbing. AMD has actually just been super constant with their execution for many years now, and it’s settling.”Inventory and economy to blame for recession Most of the

decline in shipments is due to excess inventory shipping in previous quarters, according to Mercury Research study. However there are other elements at play too. CPU providers are deliberately restricting deliveries to help increase the rate of stock usage, for instance. Macroeconomic concerns are also driving PC OEMs to reduce their stock, the company says.On the server side, McCarron attributed the sales slowdown to the usual”down”portion of a data-center purchasing cycle. Usually, there are 6 to 8 quarters of buying for the information center, followed by a downturn in sales for a comparable amount of time, as clients set up and deploy the servers they bought. “We had a really great run up in 2021, “McCarron stated.”So, the peak of the cycle pretty much was best at January 2022. And now we’re heading into the really bottom of the cycle, which will probably be in Q1 [2023] It’s appearing like we’ll have a bit of a deeper-than-the-typical down part of the cycle and ideally hit bottom in Q1, however we’ll see.”Intel and AMD had new chips in the pipeline for 2022, but McCarron does not believe that the Osborne Effect (a term that explains falling sales of a soon-to-be-replaced model) is at play because purchasing cycles in the server market are much longer than those of consumers.”It’s not like customers who say’oh, there’s something new, I’ll hold off my purchase this month to purchase next month.’There’s a great deal of planning that goes into [server purchases],”he … Source