Chip-giant Intel's lead in the server market is being squashed by AMD. Latest figures from beancounters Trefis show that while Intel has maintained its leadership position in the server processor market, it has lost significant market share points to rival AMD.

The rot started in 2005 and Trefis thinks that the declining trend will continue in the future. The analysts say that the main reason for the decline can be attributed to the success of AMD’s Opteron microprocessors compared to Intel’s Xeon.

Intel’s server processor market share has decreased from 95 per cent in 2003 to 70 per cent in 2009. Between 2004 and 2007, Intel lost around 25 market share points to AMD.

AMD chips had memory controller integrated on the CPU, while Intel’s didn’t, resulting in superior performance by AMD microprocessors. Intel’s high-end server chip, Itanium, required customers to rewrite software.

AMD’s 64-bit processor was back compatible with 32-bit operating systems while Intel’s was not. Trefis thinks that Intel’s server processor market share will fall from 73 per cent in 2010 to around 68 per cent by 2016.