Intel gaining ground in 2008

However, researchers at iSuppli said that rival chipmaker AMD could offset its slow start to the year by making long-term gains.

Intel's market share increased slightly over the year, rising from 78.5 per cent in the fourth quarter of 2007 to 79.7 per cent in the fourth quarter of this year.

AMD, on the other hand, saw its market share drop from 14.1 per cent in late 2007 to 13 per cent in the first quarter of 2008.

While the numbers paint a bleak picture for AMD in the short term, analysts say that the chipmaker has plenty to be optimistic about in the long term.

ISuppli noted that, when compared to the first quarter of last year, AMD has increased its market share by 2.2 per cent over the year, while Intel's has dropped 0.7 per cent.

"AMD's PC microprocessor product portfolio has become much stronger during the past year, particularly on the desktop side," said Matthew Wilkins, principal compute platforms analyst at iSuppli.

"At the beginning of the year we saw AMD add the quad-core Phenom microprocessors to its desktop portfolio, which it has since built on with tri-core and dual-core flavours for the prosumer and business markets."

AMD struggled in the early months of 2007 when it was late in getting to market with a quad-core chip.

Meanwhile, Intel reaped the benefits of having the market to itself with the quad-core Xeon and Core 2 lines.

However, while the companies continue to fight over the market, prices have remained steady.

ISuppli reported that selling prices remained steady over the past two quarters, an indication that AMD and Intel have abandoned a price war and are instead trying to win the battle based on performance.

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