Update 2/3/21: We've added commentary from Dean McCarron of Mercury Research.
The Mercury Research CPU market share results are in for the fourth quarter of 2020, with the headline news being that, during the quarter, Intel has clawed back share from AMD in the desktop PC market for the first time in three years. Intel also stopped its slide in notebook PCs, gaining share for the first time in three years. AMD lost share in the overall x86 market during the quarter, but notched a solid gain for the year. Meanwhile, AMD continued to make slow but steady gains in the server market.
It's noteworthy that the fourth quarter of 2020 was anything but typical: The PC market continued its pandemic-fueled surge, seeing its fastest growth in a decade. For example, while AMD lost share in the overall x86 market (less IoT) during the quarter, Mercury Research pegs the overall x86 market growth rate at an explosive 20.1%.
"New record highs for total processor revenues were set for both Q4 and 2020, and Q4 set a new record high for quarterly unit shipments, which were more than 125 million units in the quarter," said Dean McCarron of Mercury Research.
Intel obviously captured more of that growth in the quarter than AMD, but it's important to remember that a slight loss of share in the midst of an explosive growth environment doesn't equate to declining sales - AMD grew its processor revenue by 50% last year and posted record financial results for the year. It also shipped more than a million Ryzen 5000 processors in the quarter, according to McCarron research.
Shortages have plagued AMD due to ongoing supply chain issues. Given the lack of AMD products on shelves, the company is obviously selling all of the silicon it can punch out, signaling strong demand. AMD expects to see 'tightness' throughout the first half of 2021 until added production capacity comes online, meaning we could see a limited supply of AMD's PC and console chips until the middle of the year (you can see AMD CEO Lisa Su's take on the situation in our recent interview).
Those shortages led to a scarcity of AMD's chips during the critical holiday shopping season in the fourth quarter, while Intel's chips were widely available and often selling at a discount. That obviously helped Intel recoup some share. During its recent earnings call, Intel also cited improving supply of lower-end processors, like those destined for Chromebooks, as a contributing factor. Intel CEO Bob Swan noted the company increased its PC CPU units by 33% during the fourth quarter.
Intel has also expanded its chip production by leaps and bounds over the last several years as it recovered from its own shortage of production capacity. The advantages of its IDM model are on clear display during the pandemic - the company's tight control of its supply chain and production facilities have allowed it to better weather disruptions. That's an important consideration as the company has come under intense criticism that it should spin off its fabs while it weighs how much of its own production it should outsource (you can see Bob Swan's take on the situation in our recent interview).
We've added in commentary from Dean McCarron of Mercury Research below.
AMD vs. Intel Desktop PC Market Share Q4 2020
|AMD Desktop Unit Share||19.3%||20.1%||19.2%||18.6%||18.3%||18%||17.1%||17.1%||15.8%||13%||12.3%||12.2%||12.0%||10.9%||11.1%||11.4%||9.9%||9.1%|
|Quarter over Quarter / Year over Year (pp)||-0.8 / +1.0||+0.9 / +2.1||+0.6 / +2.1||+0.3 / +1.5||+0.3 / +2.4||+0.9 / +5||Flat / +4.8||+1.3 / +4.9||+2.8 / +3.8||+0.7 / +2.1||+0.1 / +1.2||+0.2 / +0.8||+1.1 / +2.1||-0.2 / +1.8||-0.3 / -||+1.5 / -||+0.8 / -||-|
AMD recently introduced its Ryzen 5000 processors that take the lead in every meaningful metric from Intel's Comet Lake chips, but a lack of supply could have hindered the company's gains in this fast-growing segment. Intel's Rocket Lake lands in Q1 2021, which could present more competition for AMD's Ryzen 5000.
While AMD lost some share here during the quarter, it gained 1 percentage point compared to Q4 2019. However, AMD recently noted that its Ryzen 5000 chips doubled the launch sales of any other previous Ryzen generation, and annual processor revenue grew 50% even though the PC market only grew 13%. It's logical to expect that AMD will prioritize the production of these higher-margin desktop processors to maximize its profitability.
AMD has noted that its shortages are most acute in the lower end of the PC market, while Intel says it has improved its own shipments of small-core (lower-end) CPUs.
"Intel's increased capacity enabled the company to out-grow AMD in the fourth quarter, resulting in Intel's first share gains in both the client desktop and mobile CPU segments in three years," said McCarron.
"Unlike mobile, Intel's share gains in the desktop market were due to higher large-core shipments, with i3 and i5 volumes growing in the quarter. Again, Intel's increased capacity for CPU manufacturing was a factor in the higher growth and share gains."
"AMD also grew strongly in client CPUs, just less so than Intel, which is where AMD's share loss came from. In desktop, it's particularly noteworthy that the Ryzen 5000 "Vermeer" core CPUs had an explosive ramp in their first quarter of shipments, out-shipping AMD's best prior desktop CPU ramp by more than 2X. We believe AMD shipped close to a million units of Ryzen 5000, resulting in AMD having a record high desktop average price for the quarter."
AMD vs. Intel Notebook / Mobile Market Share Q4 2020
|AMD Mobile Unit Share||19%||20.2%||19.9%||17.1%||16.2%||14.7%||14.1%||13.1%||12.2%||10.9%||8.8%|
|Quarter over Quarter / Year over Year (pp)||-1.2 / +2.8||+0.3 / +5.5||+2.9 / +5.8||+0.9 / +3.2||+1.5 / +4.0||+0.7 / +3.8||+1.0 / +5.3||+0.9 / ?|
Recently, this has been AMD's fastest-growing market. The mobile segment comprises roughly 60% of the client processor market, meaning any gains are very important in terms of overall volume and revenue.
Intel has cited its increasing penetration into the lower-end of the market, like Chromebooks, which likely contributed to its strong gains here. Again, AMD has said that its shortages are most pressing in the lower-end of the market.
Notably, AMD remained in the black here for the year, with a 2.8 percentage point gain. AMD recently launched its Ryzen 5000 Mobile processors, which bring the powerful Zen 3 microarchitecture to laptops for the first time. AMD has 50% more designs coming to market than the previous-gen Ryzen 4000 lineup, but supply could be tight.
"The fourth quarter was characterized by very high growth in general, but extreme growth in the mobile CPU segment in particular. Mobile CPU shipments are up nearly 60 percent on-year primarily due to Intel increasing supply. The demand that is absorbing all these new mobile processors is presumed to be due to COVID-19 related acceleration of the desktop to notebook transition that has been going on for the past few years, combined with an entry-level mobile CPU market that has been under-served for more than a year and is believed to have created a large backlog of demand for low-cost CPUs waiting to be filled," McCarron noted.
"A very large portion of the growth in the quarter of both mobile CPUs and overall shipments was due to a massive increase in entry-level processors such as Intel's Celeron and AMD's "Stoney Ridge" A4 and A6 series, both often used in Chromebooks and low-cost PCs. Many of these are believed to be shipping into the educational PC market. The low-end growth is a continued trend from last quarter. Increased manufacturing capacity has allowed Intel to greatly increase the supply of "small core" processors like Celeron and Pentium," McCarron said.
AMD vs. Intel Server Unit Market Share Q4 2020
AMD bases its server share projections on IDC's forecasts but only accounts for the single- and dual-socket market, which eliminates four-socket (and beyond) servers, networking infrastructure and Xeon D's (edge). As such, Mercury's numbers differ from the numbers cited by AMD, which predict a higher market share. Here is AMD's comment on the matter: "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."
|AMD Server Unit Share||7.1%||6.6%||5.8%||5.1%||4.5%||4.3%||3.4%||2.9%||3.2%||1.6%||1.4%||0.8%|
|Quarter over Quarter / Year over Year (pp)||+0.5 / +2.6||+0.8 / +2.3||+0.7 / +2.4||+0.6 / 2.2||+0.2 / +1.4||+0.9 / +2.7||+0.5 / +2.0||-0.3 / -||+1.6 / 2.4||+0.2 / -|
AMD continues to chew away server share from Intel at a steady rate. These gains come on the cusp of the company's highly-anticipated EPYC Milan launch in March. It's logical to expect that some customers may have paused purchases on current-gen EPYC Rome processors in anticipation of the looming Milan launch, and the resultant pent up demand could increase AMD's server penetration next quarter. Also, given the importance of this lucrative segment, AMD will likely prioritize server chip production.
"AMD did continue to gain share in the server CPU market, with the new Milan processor contributing to the gains while the older Rome core EPYC continued to grow," noted McCarron.
AMD vs. Intel Total Market Share Q4 2020
|AMD Overall x86||21.7%||22.4%||18.3%||14.8%||15.1%||14.6%||13.9%||12.3%||10.6%|
|Overall PP Change QoQ / YoY||-0.7 / +6.2||+4.1 / +6.6||+3.5 / +1.2 (+3.7?)||-0.7 / ?||+0.9 / +3.2||+0.7 / +4||?||?||-|
The overall x86 market grew at an explosive 20.1% rate during the quarter, reflecting that a growing TAM benefits both players. AMD lost a minor amount of overall share during the quarter, but gained 6.2 percentage points for the year.
"On an annual basis (not in the charts) Intel remained the market leader with 80.3 percent share, but lost 3.7 points of share to AMD. AMD's share grew to 19.6 percent for the year," McCaron said.