Global processor shipments experienced a downturn in the second quarter of 2026 compared to the same period in the previous year, according to recent market analysis. The contraction was primarily attributed to reduced volumes in system-on-chip and embedded processors, linked to a decrease in AMD’s game console business, alongside a significant drop in desktop CPU shipments. Despite the overall market shrinkage, AMD demonstrated a consistent trend of increasing its market share across most processor categories tracked by research firm Mercury Research.
Desktop Demand Weakens Under Price Pressure
Shipments of desktop CPUs saw a substantial decline of over 20% year-on-year. Mercury Research indicated that this downturn was not due to typical seasonal fluctuations but rather a consequence of diminished demand for high-end gaming PCs. The rising cost of personal computers, exacerbated by increased prices for memory and graphics processing units (GPUs), appears to be a major deterrent for consumers. Chip manufacturers are reportedly prioritizing the production of more profitable high-bandwidth memory for AI servers, which has contributed to the scarcity and higher cost of components like RAM. Similarly, a shortage of consumer GPUs is believed to stem from broader supply chain pressures within the semiconductor industry.
“Higher PC prices and limited GPU supplies are having a significant impact,” stated Mercury Research in its findings. This environment has allowed AMD to capture a larger portion of the desktop processor market. While AMD’s desktop shipments also decreased, its decline was less pronounced than Intel’s. Consequently, AMD’s share of the desktop processor market grew to nearly 35%, an increase from approximately 32% recorded a year prior.
Mobile and Server Segments Show Growth, AMD Extends Lead
In contrast to the desktop segment, mobile processor shipments experienced robust growth compared to the preceding quarter. This surge followed Intel’s expansion of its manufacturing capacity after two quarters of significant supply constraints. Intel successfully increased its mobile CPU output by millions of units in the second quarter, helping to bridge the gap between available supply and market demand. Despite Intel’s efforts to ramp up production, AMD managed to enhance its share in the mobile processor segment, reaching nearly 29%, a notable rise from 20.6% in the same quarter of the previous year.
The server processor market also exhibited strong performance, with shipments increasing by 20% year-on-year. Mercury Research pointed to heightened demand for both datacenter-class chips and processors designed for networking and storage applications. AMD continued its upward trajectory in this sector, with its server processor share climbing to 34.5%, up from 27.3% a year earlier. When focusing specifically on the high-performance Intel Xeon SP and AMD EPYC processor lines, AMD’s share in this sub-segment reached an impressive 46.4%.
Arm Architecture Continues Steady Advance
Mercury Research also monitors the less prominent Arm-based CPU market for PCs and servers, acknowledging that its estimates in this area carry more uncertainty due to the decentralized nature of revenue reporting for Arm chips. The analysis indicated significant growth for Apple’s Mac computer lineup, including its more affordable Neo models. Solid gains were also observed for Arm-based Chromebooks. Across the client computing market, Arm-based systems achieved a record high of 15.3% market share during the quarter, representing a 0.9 percentage point increase. In the server domain, Arm’s share also hit a new record, reaching 13.6%, a 0.5 percentage point rise from the previous period.
Supply Chain Pressures Shape Market Dynamics
The collective data suggests that the current processor market dynamics are less influenced by shifts in consumer preferences and more by supply chain pressures, particularly those stemming from the artificial intelligence (AI) boom. The scarcity of memory and GPUs appears to be significantly impacting traditional desktop PC buyers. Meanwhile, demand in the datacenter and mobile sectors remains resilient. This scenario positions AMD favorably to continue capitalizing on Intel’s ongoing, albeit uneven, recovery in production capacity.
The overall trend indicates a market grappling with component shortages and rising costs, leading to a contraction in certain segments while others, driven by enterprise and mobile needs, show resilience. AMD’s strategic gains in market share across multiple categories highlight its ability to navigate these complex market conditions.
