Intel has so far enjoyed an almost unchallenged reign as the king of the PC processor market.
But industry watchers now believe that supply problems and some timely launches by rivals may slowly but surely be starting to chip away at the supplier's dominant market share.
Arch rival Advanced Micro Devices (AMD) already scored a victory against Intel earlier this year, after beating it in the race to make the first 1Ghz processor. And earlier this week, the company also launched a new range of processors which, although not a major breakthrough in chip technology per se, could not have come at a better time.
On Monday, AMD unveiled an enhanced version of its Athlon processor, codenamed Thunderbird, which is aimed at high-end consumer and business desktops. The chip is available in six different clock speeds ranging from 650Mhz to 1Ghz.
The vendor also opened its new manufacturing facility in Dresden, where, for the first time, it will manufacture processors based on copper circuitry rather than aluminum. This represents yet another victory over Intel, which has yet to ship a copper chip.
To make matters worse, Intel has also experienced supply shortages because of higher than expected demand for its offerings, and these problems are expected to continue until at least the third quarter of this year.
As a result, industry analysts believe that if AMD can deliver its new chips in high enough volume, it could be the company's big chance to break into the business market - a move that is essential if it is to steal market share away from Intel.
The battle for business
However, while AMD has managed to win over PC manufacturers during the course of the last year to integrate its chips into their consumer PCs, it has so far failed to convince any major vendors to use its, rather than Intel's, processors as the basis for their business PCs.
But AMD is set to launch a low-end version of Athlon - codenamed Duron - which will be targeted at low-cost business desktops later this month. And it's this that analysts expect to really turn up the heat on Intel.
Martin Brampton, research director at Bloor Research, said: "AMD seems to be setting the pace. It appears to be pipping Intel to the post at the top end, which is good for PR. But the broader market is the mid to lower end, where this new chip [Duron] is targeted."
Martin Reynolds, senior analyst at US-based research company Gartner, agrees because, he claims, AMD has the advantage of not having delivery problems. Its products also have some technological benefits over Intel's.
"AMD's Athlon represents the company's most serious challenge to Intel's performance advantage yet. Not only does the product outperform Intel's 0.25 micron Pentium III product line on a clock-for-clock basis, but AMD is shipping significant volumes of the product. Intel's Coppermine devices may well recover the performance leadership crown from AMD, but the Athlon appears to have room to advance," he said.
Coppermine is real competition
Coppermine is a souped-up version of Intel's Pentium III processor and is based on 0.18 micron manufacturing technology. This gives it a 28 per cent performance boost over previous 0.25 micron technology.
Reynolds continued: "As with Coppermine, Athlon is the vanguard of new technology rather than the thrust of a mature design. Therefore, AMD deserves serious recognition from major vendors in performance-based product situations."
"AMD's future lies squarely on Athlon's shoulders. If AMD can ramp this product, deliver with its Dresden fab at 0.18 micron and with copper, and convince top-tier OEMs to put the Athlon into commercially targeted systems, it will have a nice business and prove to be a worthy competitor to Intel. This will take a lot of effort from AMD, but one that its executives believe the company is ready for," he added.
And AMD also has one or two other tricks up its sleeve that could play a major role in winning market share from Intel.
Late last year, the supplier unveiled details of its eighth generation processor, which it claims will provide users with an easier migration path to 64-bit computing than Intel's Itanium family of chips.
AMD's Sledgehammer processor is based on an x86 64-bit architecture and includes a new system bus called Lightening Data Transport. Unlike Intel's 64-bit processors, which are based on a completely new architecture, AMD claims that Sledgehammer is compatible with existing x86 32-bit software applications and operating systems.
Richard Baker, AMD's regional marketing manager, attested: "Users don't have to rewrite all modules as with Intel's Merced. Sledgehammer allows you to use existing software and expertise. It's a seamless migration to 64-bit."
AMD has extended its version of Intel's x86 architecture to support 64-bit addressing and data spaces. Future 64-bit processors will be able to detect which mode is needed and execute instructions accordingly.
Gartner's Reynolds said: "AMD's approach is interesting because it is entirely revolutionary and comes at little expense in silicon - AMD states that it will increase the die area by less than five per cent. The challenge is encouraging Microsoft and other application developers to follow this path."
"AMD appears ready to capitalise on the work it has put in with the Athlon and in developing a product line-up that attempts to match Intel step for step. However, AMD's past implementation problems, whether product or infrastructure driven, continue to cause a reserved optimism for its long term outlook," he continued.
Setting the foundations for success
While the company's current position looks good, it is clear that it has its work cut out to seize sizeable market share from Intel - although it appears to have set the foundations for such a move.
"It is clear that AMD has a very strong position in the value oriented consumer PC market. It has the potential with the Athlon to break into higher-performance PC markets, but it will take a lot of effort on the company's part to break through the corporate barrier. A string of successful quarters will go a long way in displacing current reservations," Reynolds said.
Despite its rival's seemingly bright future, Intel, for the time being, claims it is not too concerned.
"On the supply side, we are ramping Pentium III production faster than any other product line," said a spokesman. Intel now has five fabs producing 0.18 micron Pentium III chips and will have a further three by the end of the year, he claimed.
"We have also increased spending on our total manufacturing capacity by another $1 billion to $6 billion this year. But we always take competition seriously," he added.
IBM and Technical University of Munich team demonstrate how Shor's algorithm, which can't be cracked by conventional computers, can be solved quickly with quantum computing
Hubble Space Telescope finds superflares from young red dwarfs could strip away planetary atmosphere
Younger stars are 100 to 1,000 times more energetic than when they're older
Two of the big four supermarkets will use the system to control sales of restricted products
PUBG news and updates: November's Update #23 to bring new Skorpion pistol and changes to blue zone visibility
Genuinely useful side-arm coming to PUBG in Update #23