In the wake of the triumph against its archrival, Intel, a semiconductor giant in terms of market share, Advanced Micro Devices (AMD), a semiconductor solution provider, has turned more cautious in its market approach. The company has pulled out its dual core Opteron server chips from its product line, as its shares surged to 20 percent from 17 percent in this quarter for the first time in five quarters. Intel's market share nose-dived by 4.7 percent, reducing it to 77.3 percent.

The cut of dual-core server processors is an incremental step, as chip companies like AMD and Intel add cores to improve processor performance while trying to reduce power consumption. Intel's rival also strives to build a server chip with up to 12 cores by 2010 and 16 cores by 2011 and would unveil its server chip named Istanbul, which will support six cores, in June. The new server chips would be an answer to the new range of Xeon processors introduced by Intel, code-named Nehalem. Analysts believe the Nehalem chips would enable Intel to overcome limitations it faced earlier in terms of memory and performance. Intel too has plans to bring in its Nehalem-based chips with six cores and eight cores by end of the year.

AMD is also mulling over cutting the prices of its products and bring back the hay days its Opteron chips enjoyed, that made the company hit 25 percent market share a few years ago. The firm would slash prices of some of the Opteron chips by 43 percent. The company's earlier price cut initiatives did not work well as it had lost shares for two years to Intel despite the price reduction of its processors and graphic cards.