AMD: Double Your Market Share or Shut Down

The antitrust lawsuit filed by AMD against its arch-rival Intel unveiled more details about AMD's precarious financial state. According to a brief released by chip manufacturer's lawyers, the company has to either double its share of the microprocessor market or shut down its business and go home.

The brief claims that Intel's antitrust practices hit not only AMD's income, but also the stability of the company itself. AMD had 13 percent of the processor market towards the end of 2007 and the company's lawyers claim that the figure is "less than half of what it requires to operate long-term as a sustainable business."

This statement will play a key role as the lawsuit unfolds and might bring AMD the claimed financial damages, but at the same time it could also repel the company's OEM customers who have already lost fortunes because of the prolonged delays of the Barcelona chip. This is mostly due to the fact that corporate customers take into account the long term viability of a hardware manufacturer, as they would also buy the same system in the future.

More bad news for the company could push its few loyal customers into Intel's arms. "It will push them in the other direction", said Rajnish Arora, director of enterprise server and workstation research at IDC Asia-Pacific.

AMD's brief was heavily stripped down by the court and a vast amount of information regarding Intel's relationship with top-tier system vendors was blacked out in the public version of the document.

Intel's anti-competitive behavior compensates for the revenue brought by AMD's successful line of Opteron / Barcelona server processors. "That AMD gained some share and revenue is immaterial. It gained sufficiently less share and sufficiently less revenue so as to suffer a critical diminishment of its innovation roadmap", the brief said.


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