US Semiconductors_ 3Q24 Microprocessor Market Share. AMD and ARM Both Gain Share Over Intel As Intel Has Lowest Share Since 2006.

Summary of US Semiconductors 3Q24 Microprocessor Market Share Industry Overview - The report focuses on the US semiconductor industry, specifically the microprocessor market for the third quarter of 2024 (3Q24) [2][11]. Key Companies Involved - Advanced Micro Devices (AMD) - Intel Corporation (INTC) - ARM Holdings PLC (ARM) Core Insights and Arguments Microprocessor Market Performance - Total microprocessor unit shipments increased by 1.5% quarter-over-quarter (QoQ) in 3Q24, surpassing the seasonal decline of 2.8% QoQ, driven by above-seasonal notebook and server CPU shipments [3][11]. Market Share Changes - AMD: - Gained 233 basis points QoQ, reaching a total market share of 21.6% in 3Q24, up from 19.2% in 2Q24 [4][12]. - Notable share gains in: - Notebook: Increased by 174 basis points QoQ to 19.8% - Desktop: Increased by 513 basis points QoQ to 26.8% - Server: Slight increase of 2 basis points QoQ to 22.53% [4][12]. - Intel: - Lost 262 basis points QoQ, resulting in a market share of 68.4% in 3Q24, down from 71.1% in 2Q24 [5][15]. - Recorded the lowest x86 share since 2006 at 76.0% in 3Q24. - Declines in specific segments: - Desktop: Down 608 basis points QoQ to 66.4% - Notebook: Down 171 basis points QoQ to 68.9% - Server: Down 33 basis points QoQ to 70.5% [5][15]. - ARM: - Increased market share by 29 basis points QoQ to 10.0% in 3Q24 [6][17]. - Gains in: - Server: Up 31 basis points QoQ to 7.0% - Desktop: Up 95 basis points QoQ to 6.8% - Notable loss in notebook share, down 2 basis points QoQ to 11.39% [6][17]. Shipment Trends - Notebook MPU shipments rose by 3.2% QoQ, exceeding the seasonal decline of 10.4% QoQ. - Desktop MPU shipments fell by 4.8% QoQ, underperforming against a seasonal increase of 23.9% QoQ due to excess inventory. - Server MPU shipments increased by 7.0% QoQ, also exceeding the seasonal decline of 6.0% QoQ [7][19]. Ratings and Recommendations - Intel (INTC): Maintained a Neutral rating [3][22]. - AMD: Maintained a Buy rating, with a target price of $200.00, reflecting a valuation of 46x C25E EPS, driven by growth opportunities in AI [25][26]. - **ARM**: Valued at a target price of$170, based on a 1.7x PEG ratio, reflecting strong growth potential [30][33]. Risks Identified - AMD: - Competition with Intel and NVIDIA could impact market share and estimates [26]. - Dependence on the PC market, which constitutes about 20% of sales, makes it vulnerable to fluctuations in IT spending [27]. - Significant revenue dependence on major customers like Sony and Microsoft [27]. - Intel: - High dependency on the PC and server markets, which account for approximately 80% of sales, poses risks related to IT spending fluctuations [39]. - Customer concentration risk, with three largest OEMs representing about 46% of revenue [40]. - ARM: - Risks associated with cyclical recovery and competition from RISC-V in the chip design market [34][35]. - High customer concentration, particularly with Arm China, which accounts for 24% of FY23 sales [36]. Conclusion The 3Q24 microprocessor market shows a significant shift in market share dynamics, with AMD and ARM gaining ground at the expense of Intel. The report highlights the competitive landscape and the potential risks that could affect future performance in the semiconductor industry.