Analysis of the processor market for the second quarter of 2026 reveals mixed trends. While server and mobile processor shipments are showing growth, the desktop segment is experiencing a decline, largely attributed to increased system costs. Despite this consumer weakness, AMD has successfully increased its market share across multiple processor categories, according to data from Mercury Research.
Challenges in the Desktop Computing Sector
Overall processor shipments in Q2 2026 were lower compared to the same period the previous year. Mercury Research linked the decline to reduced volumes in System-on-Chip (SoC) and embedded units, partially due to a downturn in the gaming console business for AMD, alongside a significant dip in desktop CPU sales.
The research firm specifically linked the drop in desktop chips to decreased interest in high-end gaming personal computers. Mercury stated that “higher PC prices and limited GPU supplies are having a significant impact on end demand for desktop PCs, and thus desktop CPUs, as well.”
The increased cost of PCs is reportedly caused by rising memory component prices. This shortage stems from chip manufacturers prioritizing the production of high-bandwidth memory chips destined for AI servers, and a similar shortage has impacted the availability of consumer graphics processing units (GPUs).
Desktop CPU shipments saw a year-on-year drop exceeding 20 percent. Although AMD experienced a decrease, its decline was less severe than that of Intel. Consequently, AMD captured substantial market share in the desktop segment, reaching nearly 35 percent of the market, up from approximately 32 percent in the prior year.
Growth in Server, Mobile, and Arm Markets
In contrast to the consumer decline, the server and mobile processor markets demonstrated strength. Mobile processors for tablets and laptops saw strong growth in the preceding quarter, maintaining a modest upward trend compared to the year prior.
For server processors, shipments rose by 20 percent year-on-year, marking a more gradual increase than the first quarter. Mercury Research noted that demand was robust for both datacenter-class CPUs (such as AMD Epyc and Xeon SP) and processors designed for networking and storage applications.
AMD continued to gain ground in the enterprise sector, securing 34.5 percent of server processors, an increase from 27.3 percent the previous year. Furthermore, when considering only Intel Xeon SP and AMD EPYC chips, AMD’s share climbed to 46.4 percent.
Mobile CPU capacity saw a significant boost from Intel during Q2, narrowing the supply-demand gap. Despite this, AMD’s market share in the mobile segment rose to nearly 29 percent, up from 20.6 percent recorded in the same quarter the previous year.
The Rise of Arm Architecture
The Arm-based CPU market also showed substantial growth across both client and server applications. Mercury Research estimates that Arm captured 15.3 percent of the client market in Q2 2026, marking a record high and an increase of 0.9 percentage points. In the server sector, Arm’s share reached a record 13.6 percent, a gain of 0.5 percentage points.
