If AMD’s Ryzen processors are so good and selling out, how does Intel still retain a higher market share?
In: Economics
There’s a lot to unpack here. To begin: the fact the AMD is finally making competitive consumer grade CPU’s doesn’t mean that suddenly Intel’s are bad. Intel still makes extremely capable and reliable CPU’s.
Something else to consider here is that most of the talk around AMD’s product is centered around their consumer grade products. Gaming, workstation and laptop processors. This is only a fraction of the CPU marketplace and Intel makes a LOT of money selling industry grade CPU’s. These CPU’s are designed to run server farms and AI machine learning systems, etc. A single Intel Xenon CPU can cost over $14,000.
Intel has been bleeding market share in the consumer market at an accelerated rate, but this has less to do with the CPU’s themselves and more to do with manufacturing capability. Intel’s fabs currently can not output enough product to meet demand. As a result companies like Dell, Gateway, Toshiba, etc have been switching to AMD processors fabbed by TSMC simply because Intel doesn’t have any product to sell.
A few basic things probably explain this;
* People don’t upgrade their systems completely that often
* Many CPUs make their way to 2nd hand markets
* You often read about the cutting edge tech, not commonly bought lower end products
AMD made a huge comeback in 2017, many people still maintain their systems in one way or another since then. Although AMD now has a slight advantage in desktop CPU market.
Intel is still dominant in laptop CPU market share. AMD has just recently managed to deliver attractive options in this segment, and again, people don’t buy new laptops every year.
Intel is still dominant in the server space, this I will mainly attribute to server infrastructure being replaced way less often than people believe. You don’t want to replace working essential hardware, you avoid it as much as possible.
Intel is still a well recognized name and that’s worth something. If you want CPUs that run at 5 GHz, Intel tends to be the better choice in that regard, and the IPC (Instructions Per Clock) race has largely still be in Intel’s favour since the original Ryzen launch in 2017.
There’s also a lot of business reasons. Laptop, PC etc makers sign contracts to get parts delivered for their products, and part of that might be an exclusivity deal for some time period or product line. Dell, etc have been partners with Intel for quite some time now and you don’t just throw that away when the competition stirs up the market. I would, but Dell wouldn’t, and I only build a PC maybe once every few years.
Intel has brand name recognition. As a result of that brand name recognition, they have a lot of deals for including their processors in prebuilt systems. Most systems out in the world are prebuilt, so Intel ends up having significantly more market share as a result.
Staggered upgrade cycles.
###In Desktops
if you have an i-series quad core from 2012 or newer it’s likely good enough. Ryzen 1000 releases and you don’t upgrade cause new motherboard plus new cpu is expensive maybe 5% upgrade but probably more like 2% cause 3% stay with intel. Ryzen 2000 same thing except 10% switch with around 4% going AMD and 6% staying on intel. Ryzen 3000 okay now you might consider it since your cpu is almost 10 years old probably 35% upgrade and it’s 25% AMD and 15% Intel since Intel is worse but brand loyalty. Ryzen 5000 yeah you’re probably pulling the trigger if what you currently have isn’t good enough probably 45% upgrade with 40% going AMD 5% going Intel because brand loyalty. Shift everything further out for each cpu generation. Notice too that there’s still 5% left and they’re the ones that won’t upgrade until their motherboard or cpu dies.
###In Laptops
laptops, in like 99% of the cases can’t replace their cpu. Laptop manufacturers also tend to have joint venture agreements that make switching cpu vendors tough. Laptop hardware has come a long way though. So again laptop from 2012. Ryzen 1000 was desktop only so you chose between a weak and power hungry apu or Intel and the odds of Intel were much higher for getting the rest of what you wanted in the laptop 10% upgrades 1% amd 9% intel. Ryzen 2000 still desktop only so same thing 25% upgrades 1% amd 24% Intel. Ryzen 3000u comes to laptops and is slower and more power hungry but very close to Intel 45% upgrades 5% AMD and 40% Intel. Ryzen 4000 comes out and smokes Intel in both power consumption and performance 15% upgrades 5% amd and 10% Intel. You may wonder why despite being better by now laptops aren’t all running ryzen 4000. Well there’s no U variant and pesky joint venture contracts. Remaining 5% are still holding out and may do so until their laptop dies.
###In Servers
A company bought 5 servers in 2012 with Intel xeon chips. They only phase them out as hardware begins to limit performance or as hardware dies. Maybe 1 of the 5 will be a bottleneck by 2021 and then they still have all sorts of complicated conditions such as instruction sets, core count, xeon specific IT configs (Intel vPRO or IME), clock speed, ipc, etc so maybe they add an epyc server instead of deprecating the old hardware. Maybe when hardware dies they have warranty replacement on it.
###In Workstations
You buy a xeon workstation in 2012. Threadripper 1 comes out and you want to upgrade but the xeon does well enough and you’ll get more milage out of a gpu upgrade roughly 5% upgrade 2% amd 3% Intel. Threadripper 2 comes out and roughly 10% upgrade 10% upgrade 4% amd 6% Intel. Threadripper 3 comes out and roughly 25% upgrade 12% amd and 13% Intel. Instruction sets matter way more here than most other workload types. But if you just want more cores for things like physics or number crunching or cgi rendering yeah you’re going threadripper. Most workstations stick with Intel or amd for a lot of reasons one of which being companies not wanting to take risks with amd that used to be worse off. Small business may behave differently though.
This is all approximations and guesstimates based on conversations I’ve had with friends involved in the industry sales. Hope this helps
Boils down to three points:
AMD only started making decent processors a few years back
Intel have held onto the market pretty much since the 8086 (30 years ago)
It takes time for people to be able to afford to buy new processors/ systems and for them to be produced
Basically, Intel still hold the market share because they’ve held it for much longer, and while AMD’s processors are better overall, Intel’s do have strong points, and people will buy them because they’ve always brought intel. Hence, they still hold the market share.
Give a few years, and it’ll probably tip more in AMDs favour, more than it already is.
Latest Answers