AMD Finishes 2006 Strong, Chip Industry Future Bright

Dennis Faas's picture

During the summer of 2006, the fortunes of major computer chip manufacturers Intel and AMD looked anything but promising. Both posted major losses for the period, with AMD desperately branching out into the graphics card market in order to gain some, or any, momentum.

Although it resembled a captain frantically trying to right a sinking ship, it appears AMD knew what it was doing all along. The company posted impressive -- if not incredible -- year-end profits, with the entire industry's future looking bright thanks to the Far East.

By glancing at the chipmaking industry's revenue for February, 2007 the numbers don't appear so exciting. In fact, they're down 6.5% from January, according to statistical consultant Gartner. However, that still leaves chip makers, as a whole, up 4.2% from this time last year, when manufacturers appeared to be spiraling into an abyss of debt.

So, what caused the turnaround?

Asia. Although data shows that North and South America sales for 2006 were down 8.6%, across the Pacific pond they climbed over 10%. It's a reason both AMD and especially Intel are desperately trying to forge relationships in China. The increase in Asian-Pacific numbers subsequently led to an equally impressive hike in chipmaking equipment, up over 22% from the previous year.

What does this mean for AMD?

Although the chip company appeared headed for bankruptcy as late as summer, 2006, its revenue numbers actually lifted it into Gartner's Top Ten. By the end of last year, AMD posted an almost shocking 86.1% increase in sales over 2005. Although Intel's growth wasn't quite as dramatic, it maintained its hold on the market with a share of 11%. (Source:

The media has yet to speculate over how these sudden improvements came about. Some may say the growth is a result of Microsoft's new operating system, while others cite the steady growth of Asia's technological might. Regardless, it's a shocking story of financial turnaround for AMD and Intel. (Source:

| Tags:
Rate this article: 
No votes yet