INTEL CPU revenue may go down 15% in Q1 06

INTEL's revenue for desktop and servers CPUs went down from $5.256 billion in Q4 2004 to $4.929 billion in Q4 2005, a 6.2% year over year drop. AMD's CPG revenue jumped from $0.73 billion in Q4 2004 to $1.3 billion in Q4 2005, a 78% increase.

INTEL projected $9.1 to $9.7 billion total revenue for Q1 2006, down from the $10.2 billion of Q4 2005, below the previously expected $10 billion. Moreover, since INTEL revenue from CPUs was $7.3 billion, INTEL's CPU revenue may go down as much as 1.1/7.3 = 15%, q/q.

However, the $7.3 billion figure used above also included revenue from INTEL's other CPU businesses, such as those for PDAs and cellphones. If we only look at the CPUs for PCes and servers, the revenue is only about $6.1 billion. Using this number, INTEL's Q1 2006 down fall for PC processor revenue can be as much as 1.1/6.1 = 18%.

AMD projected over 70% year/year growth for Q1 2006. AMD had CPG revenue of $0.78 billion in Q1 2005, 70% growth would put Q1 2006 at $1.33 billion.

Always remember this: the x86 market is a two horse race, a win-lose situation.

According to WSJ: "The shift to AMD is apparent in a sample of fourth-quarter sales by U.S. computer retailers by Current Analysis, a market-research firm. Nearly 69% of the notebook computers sold by Hewlett-Packard Co., the No. 2 maker, used AMD chips, up from 30% for the same period in 2004, the firm said. The share held by Intel, which has long led AMD in the portable-computer market, declined to 42% from nearly 70% over the same period."

So, AMD owned 58% of the US retail notebook market in Q4 2005. Soon, this trend will propagate to the third world.