Market Share Declines Despite Data Center Growth
According to findings from Mercury Research, the semiconductor company Intel experienced a significant decline in its CPU market share, reaching a 31-year low across the x86 CPU market for both PCs and servers. This drop occurred even as the company’s Data Center Group reported substantial success, notably achieving a record 59 percent in year-over-year revenue growth for the second quarter.
The overall market share for Intel’s x86 CPUs fell below 70 percent for the first time since 1995. The research firm, which tracks CPU market data, noted that Intel’s combined market share for PCs and servers declined by 6.5 points year over year, settling at 69.3 percent. Conversely, rival AMD‘s position expanded considerably, reaching 30.7 percent, a new record for the competitor.
An Intel spokesperson addressed the strong performance of the Data Center Group and the momentum within the client business unit, referencing record year-over-year sales growth and the increasing number of long-term supply agreements.
Performance Across Key CPU Segments
Mercury Research provided detailed figures for various segments. When analyzing total CPU shipments for PCs and servers (excluding embedded, IoT, and semicustom products), the market split showed Intel at 69.3 percent and AMD at 30.7 percent.
When including all segments, the figures shifted. Intel’s share was reported at 65.9 percent for the second quarter—a decline of 4.6 points year over year and 1.5 points sequentially. AMD captured 34.1 percent of the market. This all-inclusive measure benefited AMD due to strong, better-than-expected shipments of system-on-chips intended for gaming consoles, a segment where Intel does not possess a major business presence.
Server and Desktop Performance
Despite Intel’s high demand in the second quarter, AMD managed to increase its server CPU shipments faster than Intel did during the same period. For the server CPU market, AMD’s share grew by 7.3 points year over year and 1.3 points sequentially, reaching 34.5 percent, compared to Intel’s 65.5 percent. However, the research firm noted that if the segment included embedded CPUs used for networking and storage in data centers, AMD’s share would have grown by 9.2 points year over year and 2.9 points sequentially to 46.4 percent, while Intel’s share would have been 53.6 percent.
In the PC market, AMD’s overall share grew 6.4 points year over year and increased under 1 point sequentially to 30.3 percent, while Intel held 69.7 percent. The declines in desktop CPUs were attributed to market constraints, including high PC prices and limited GPU supplies, factors exacerbated by the AI infrastructure boom, which is diverting component manufacturing focus away from personal computers and toward data centers.
In the laptop segment, AMD saw the fastest market share growth, reaching 28.9 percent. This marked an increase of 8.4 points year over year and under 1 point sequentially, against Intel’s 71.1 percent. The research firm noted that total shipments in this segment saw strong sequential increases, which contrasted with prior warnings about weakness in the client segment.
Competitive Pressures and Future Strategy
The competitive environment is intensifying for both CPU manufacturers. Beyond the rivalry between Intel and AMD, both companies are increasingly facing competition from the growing number of firms utilizing the Arm instruction set architecture. This includes chip designs from Nvidia (Vera CPU), hyperscalers like Amazon Web Services (AWS) developing custom data center designs, Apple with its M-series chips in Mac computers, and Qualcomm with its Snapdragon processors.
While Intel is working to improve factory output and boost capacity to support customer demand, AMD has been gaining traction. AMD CEO Lisa Su reportedly announced during the second-quarter earnings call that the company could exceed $30 billion in Instinct revenue next year, driven by major customer commitments.
To counter the market pressure, Intel is actively seeking to diversify its revenue streams. The company recently secured Fortinet as a customer for its contract manufacturing and custom chip design services. Furthermore, Intel’s custom silicon business is reportedly approaching a $2 billion annual run rate, while the firm continues to refine its AI chip strategy, focusing on inference and agentic AI workloads powered by GPUs.
A senior systems integrator executive, speaking to the press, remarked on the shift in industry focus, stating that he observed Intel’s channel teams becoming more engaged with partners after a period when his attention was directed more toward AMD.
