AMD just posted its best quarter result in years and slowly becomes more than just a headache for Intel. It was time to find out more about AMD's success and climbing market shares. Randy Allen, corp. vice president of AMD's server products division, talked to us about product strategy, upcoming technologies, 65 nm transition and the impact of the antitrust complaint against Intel.

The quarterly reporting of financial results typically is not quite what makes corporations and their market segment interesting, at least if your stock portfolio isn't concerned or if you aren't in the business of predicting the future for a particular company or industry. But once in a while, these reports indicate trends that affect us all - which makes them well worth watching. And such a trend could have revealed itself earlier this week, when AMD and Intel presented their most recent financial performances to the public.

Other than expected, Intel uncovered a rather sobering result, even if the company crossed the $10 billion revenue mark for the very first time in a quarter and profits exceeded $2 billion by far. The balance sheet however showed that basically all of Intel's gains originate in the firm's mobile processor business; many other traditional processor segments - including servers - revealed declines. AMD on the other side presented sharply increasing revenues and profits and claimed that it gained market shares in desktop, server and mobile market segments.

While actual numbers of potentially shifted market shares will not be available until Gartner and IDC release their quarter reports, the stock market already has reacted to the situation. In the beginning of Nov 2005, AMD was valued at about $8 billion vs. Intel's $141 billion - or about 6% of Intel's value. Until today, AMD's market cap has grown to $15 billion, while Intel decreased to $135 billion. Suddenly, AMD is worth 11% of Intel.

We have seen AMD teasing Intel once in while over the past decade several times, but essentially, AMD has been locked down into second place. The stock market appears to believe that it could be different this time around. We should not forget that Intel still outsells AMD in every segment with a strong lead, but that lead appeared to be shrinking in the third and especially the fourth quarter of 2005.

Responsible for that shrinking lead is especially AMD's server products group. Intel's CEO Paul Otellini recently acknowledged that Intel had to give up market shares to AMD and will likely be forced to hand over more shares until the next generation of server chips arrives. The origin of this weakness is often seen in a particularly poor product lineup in the 2003 and 2004 time frame. The circumstance that Intel could not have paid not enough attention to AMD or market trends, may cause the company not just a headache now.

AMD's Randy Allen explains in this conversation with TG Daily why he believes that Intel will need much more than a new processor to be able to slow AMD's growth.