CPU Market Q1 2021: AMD’s Fastest Growth in Servers Against Intel in 15 Years

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(Image credit: Tom’s Hardware)
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AMD Market Share

(Image credit: Tom’s Hardware)

The Mercury Research CPU market share results are in for the first quarter of 2021, which finds AMD scoring its highest single-quarter market share increase in the server market since 2006, leading to record revenue as it steals more sockets from Intel. Those share gains are isolated, though, as AMD lost share in the notebook segment and overall market share while remaining flat in desktop PC chips. Those regressions might not be as problematic as they appear on the surface, though, due to AMD’s shift to producing pricier chips that generate more profit. (We have the full breakdown for each segment at the end of the article).

“While we don’t often discuss average selling prices, we note that this quarter saw unusually strong price moves for AMD — as AMD shipped fewer low-end parts and more high-end parts, as well as shipping many more server parts, the company’s average selling price increased significantly,” said Dean McCarron of Mercury Research.

It’s clear that AMD has prioritized its highest-end desktop PC models and its server chips during the pandemic-induced supply chain shortages. These moves come as the CPU market continues to move at a record pace: Last quarter marked the second-highest CPU shipment volume in history, second only to the prior quarter. Also, the first quarter usually suffers from lower sales volume as we exit the holiday season, but the first quarter of 2021 set yet another record – the 41% on-year gain was the highest for the CPU market in 25 years.

These developments benefit both companies, but AMD has clearly suffered more than Intel from the crushing combination of supply shortages and overwhelming demand. AMD actually recently lost share to Intel in both notebooks and desktop PCs for the first time in three years, but it reminded at a flat 19.3% of the desktop PC market during the quarter, meaning it stopped the slide despite supply challenges.

However, Intel’s Rocket Lake processors landed right at the end of the quarter, and they’re particularly competitive against AMD’s Ryzen 5000 in the lower end that tends to move the most volume. Additionally, these chips are widely available at retail at very competitive pricing while AMD’s chips are still a rarity on shelves at anywhere near the suggested selling price. That will make the results of the next quarter all the more interesting.

Both Intel and AMD set records for the number of units shipped and revenue during the quarter for mobile chips. AMD couldn’t stop the slide in notebook PC chips, but as McCarron points out, the company has prioritized higher-priced Ryzen “Renoir” 5 and 7 models while Intel has grown in its lower-margin and lower-priced Celeron chips. AMD slipped 1 percentage point to 18% of the notebook PC unit share.

Most concerning for Intel? It lost a significant amount of share to AMD in the profitable server market. AMD notched its highest single-quarter gain in server CPU share since 2016 at a growth of 1.8 percentage points, bringing the company to 8.9% (a few caveats apply, listed below).

While a 1.8 percentage point decline doesn’t sound too severe, it is concerning given the typically small changes we see in server market share. Intel’s data center revenue absolutely plummeted in the first quarter of the year, dropping 20% YoY while units shipped drop 13%, but Intel chalked that up to its customers pausing orders while ‘digesting’ their existing inventory. However, AMD’s financial results, in which the company’s server and semi-custom revenue jumped 286%, imply that Intel’s customers were actually digesting AMD’s chips instead. 

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