During the company's recent earnings call, AMD CEO Lisa Su alluded to market share gains in the fourth quarter of 2018 but didn't provide specific figures.
Today AMD shared numbers from third-party industry analyst firm Mercury Research that outline those gains. AMD gained share in desktop PC processors, notebooks, and servers, highlighting that its Zen-based processors continue to pressure Intel on all fronts, but more importantly, AMD's rate of growth is also accelerating. These improvements come as the company is on the cusp of releasing 7nm processors for the desktop PC and server markets, marking its first process node lead over Intel.
Desktop PCs
AMD now holds 15.8% of the desktop processor market, a 2.8% gain on a quarterly basis and a 3.9% year-over-year (YoY) improvement. That represents the company's largest portion of the market since the fourth quarter of 2014.
| Row 0 - Cell 0 | 3Q16 | 4Q16 | 1Q17 | 2Q17 | 3Q17 | 4Q17 | 1Q18 | 2Q18 | 3Q18 | 4Q18 |
| AMD Desktop Unit Share | 9.1% | 9.9% | 11.4% | 11.1% | 10.9% | 12.0% | 12.2% | 12.3% | 13% | 15.8% |
| Quarter over Quarter (QoQ) | Row 2 - Cell 1 | +0.8% | +1.5% | -0.3% | -0.2% | +1.1% | +0.2% | +0.1% | +0.7% | +2.8% |
Combining those statistics with the data Mercury Research has shared with us in the past, we see that AMD's rate of market share gain is accelerating, obviously propelled by strong sales during the holiday shopping season. This marks the second year in a row the company has dominated the holiday season–in 2017 the company tripled its sales on Black Friday and Cyber Monday.
AMD has made several strategic moves to capture sales opportunities, but Intel's nagging processor shortages have given the company plenty of room to maneuver while competing products are either not available or selling with big markups. We followed up with Mercury Research's Dean McCarron for more insight on AMD's share gains:
One is the long-term rise of Ryzen in both desktop and mobile -- the company has been slowly gaining share for many quarters. Even in the third quarter when Intel was setting records AMD's PC share was up more than 3 points on year, underscoring the slow-and-steady gains Ryzen has been delivering -- and these gains are largely in the mid- to upper-end of the market, not the low end. The other is the short-term issue, Intel's client units at the very low end (Celeron) dropped sharply in Q4, and AMD picked up a little bit of that business, and that added an extra boost to AMD's share this quarter, both because Intel was lower and because of the extra business that AMD got as a result. Depending on how Intel manages the low end business and how sticky it is, this portion of the share gains are likely far more volatile in the future.
Intel is focusing its production efforts on high margin products, meaning low-end desktop processors like Pentium and Celeron are the most impacted by shortages. That allows Intel to maximize its profitability at the price of ceding some share to AMD on the low end. Intel's production woes have also impacted the company's partners. As MSI CEO Charles Chiang recently told us, AMD is gaining share on the low end as sales of Intel chipsets have suffered. Those gains could be short-lived if Intel corrects its supply issues quickly, but it does provide AMD an opening to attract more long-term customers.
AMD also announced last year that it would focus on expanding its stable of OEM systems to build market share. That strategy appears to have paid off, as McCarron also attributed part of AMD's success to increased OEM adoption.
Notebooks
Notebook processors are critical because they comprise two-thirds of the overall processor market, but AMD has been plagued by slow uptake. That tide seems to be turning as the company gained 1.3% share on the quarter and a whopping 5.3% more share YoY. That marks the company's highest percentage of the notebook market since Q3 2013.
McCarron also attributed AMD's notebook growth to higher sales of low-end processors and increasing OEM adoption, but called out that Intel's supply of low-end chips suffered more in notebooks than the desktop, giving AMD a bigger boost in the notebook market.
Much of this growth comes on the back of the company's Ryzen Mobile processors, but as AMD CEO Lisa Su recently told us, notebook sales take longer to build due to the plethora of OEMs and retailers involved.
AMD has its second-gen Ryzen Mobile chips (codenamed Picasso) coming to market soon. Those chips come with new H-series models to attack the high end and new A-Series processors to tackle the Chromebook market, opening up two new segments. AMD also already has 33% more design wins in 2019 with OEMs, so the company is primed for more growth this year.
Servers
During the company's recent earnings call, Lisa Su said that AMD had achieved its goal to claim "mid-single-digit" data center share in 2018. However, Mercury Research's server share projections are lower at 3.2% unit share. AMD shared its take on the disparity:
Mercury Research captures all x86 server class processors in their server unit estimate, regardless of device (server, network or storage), whereas the estimated 1P [single-socket] and 2P [two-socket] TAM [Total Addressable Market] provided by IDC only includes traditional servers. We used IDC’s server forecast of the 1P and 2P server TAM of roughly 5M units to compute our server market share estimates. We believe that in Q4 2018 we achieved ~5% unit share of the 1P and 2P server market addressed by our EPYC processors (as defined by IDC).
AMD has made several notable gains in the server market with its first-gen EPYC processors, particularly with cloud service providers and hyperscale data centers, but growth hasn't been as explosive as many have projected.
The enterprise is notoriously slow to adopt new platforms, so many of AMD's early sales have been to customers evaluating the systems' suitability for long-term deployments. AMD has wisely focused its early efforts on cloud service providers because it allows potential customers to test applications with a minimum of investment.
Uptake for AMD's 7nm EPYC Rome processors is expected to be more enthusiastic due to the advantages of a smaller manufacturing process, like higher performance and lower power consumption, paired with a more established platform.
