In 2006, Intel (INTC) threw in the towel on its NetBurst family of processors. Fraught with energy consumption and heat problems, the ill-fated microarchitecture opened the door to renewed competition from rival Advanced Micro Devices (AMD). To quell this threat, Intel created the tick-tock model, which coalesced into a full-scale microchip war. The breakneck pace of die shrinks and new microarchitecture releases bled Advanced Micro dry.

According to the latest IDC report, Intel controlled 80.1% of global processors sales in 2011, Advanced Micro earned 19.7% of the total, and the Taiwanese firm VIA Technologies was responsible for just 0.4% of sales. Intel made gains in the desktop and workstation segments, but Advanced Micro gained ground in laptops. Overall, Intel lost 0.6% of world market share to Advanced Micro’s 0.7% gain.

Advanced Micro made small gains last year, but I doubt the Sunnyvale firm is popping any champagne bottles. It posted small profits in 2011, but has yet to overcome the $6 billion in net losses it incurred during 2007 and 2008 alone. The company announced layoffs in November, which cut 10% its workforce. Advanced Micro released the Fusion line of processors in late 2011, targeted at netbooks, whose growth potential was largely superseded by the introduction of tablet computers in 2009. Consumers are clamoring for Intel’s new Ivy Bridge family while Advanced Micro’s new Trinity release is largely ignored. Intel, as it turns out, is probably more worried about competition from a British firm than its classic rival.To continue reading, click here.

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