Advanced Micro Devices Inc. suffered a large drop in its share of the microprocessor market share of processor sales in the third quarter, mainly as the result of a one-time channels inventory correction, according to Mercury Research.
Dean McCarron, principal of the Scottsdale, Ariz. market analysis firm, said AMD had cut back drastically on its processor sales in the quarter to allow white box PC makers and others in the supply channel to burn off excess inventory.
AMD officials in a conference call to financial analysts two weeks ago confirmed that third quarter processor sales were held down during the channels inventory adjustment.
McCarron believed the stocks of AMD processors in the channel were now nearing normal levels, and AMD fourth quarter sales would return to more normal quantities.
He said the third quarter AMD dropoff in market share was abnormal, because shipments of all chipsets supporting AMD processors racked up a 16.7% market share in the period. "This showed that customers were working off the large inventories they had, buying more chipsets than processors during the quarter," he added.
For the record, Mercury Research said AMD's third quarter market share of 11.5% compared with 15.6% in the earlier quarter and 20% for the same period of 2001. Intel had a 86.8% share in the third quarter, up from 82.8% in the previous period and 79.2% for the year-ago quarter.