Chip sales hit $40bn with Intel still dominating

Last year was one of significant transitions in the microprocessor arena, yet the market continued to be largely a two-horse race dominated by Intel and AMD, according to figures from research firm IHS iSuppli.

Microprocessor sales bounced back in 2010, rising 25 per cent to $40bn from a six per cent decline owing to the recession in 2009, IHS iSuppli estimates.

However, despite the rapid rise of new device formats such as Apple's iPad tablet, the market continued to be dominated by Intel and AMD, whose respective shares of chip sales have remained largely static.

As expected, Intel continued to dominate with an 81 per cent share of global microprocessor sales, with AMD a distant second at 11.4 per cent. All other chipmakers accounted for just 7.5 per cent, according to IHS iSuppli.

Intel's dominance is even greater when you consider that these figures include all microprocessors, not just the x86 chips that go into PCs.

But even PC processor technology underwent a transition during 2010, as chips with built-in graphics capabilities (dubbed graphics-enabled microprocessors or GEMs by IHS iSuppli) grew to account for more than a third of all desktop and laptop shipments during this period.

"2010 was a period of major transitions in the microprocessor market, with suppliers facing a raft of changes, ranging from the new competitive threat posed by media tablets, to the robust post-recession recovery, to the technology revolution spurred by the rise of GEMs," said IHS principal analyst for compute platforms Matthew Wilkins.

However, despite the apparently static market picture, competition was intense, with AMD and Intel fighting for "every dollar possible" from system vendors, Wilkins said.

Intel actually increased its market share from 80.6 per cent in 2009, while AMD saw its share decline from 12.2 per cent in the same period.

IHS iSuppli has warned that the power supply problems experienced in Japan as a result of the earthquake earlier this month could spell trouble for the global semiconductor industry, with production in many key plants in the region halted.