Intel Takes the Lead in Chip Market : Computers: Santa Clara-based company passes NEC and Toshiba, but Japan still has the overall edge.


Reflecting the changing structure of the computer industry, Intel Corp. has vaulted to the No. 1 spot among the world’s semiconductor companies, while International Business Machines barely maintained its position as the top supplier of personal computers, according to market researcher Dataquest Inc.

Intel, powered by torrid sales of its 386 and 486 computer chips, leaped past Japan’s NEC and Toshiba to become the world’s largest chip supplier, with nearly $5.1 billion in chip revenue. Intel, based in Santa Clara, makes the semiconductors used in most IBM-compatible PCs.

Overall, American chip manufacturers gained ground on their Japanese rivals, winning 41.1% of the world market, up almost 3% from a year ago. But they didn’t overtake the Japanese, as some had expected: Japanese companies still controlled 42.8% of the $65.6-billion worldwide chip market.

A brutal price war in the personal computer business boosted sales and helped chip makers such as Intel, but IBM suffered badly. IBM’s share of the PC market plunged from 16.3% to 12.4%. Second-ranked Apple Computer’s market share rose from 11.2% to 11.9%, while third-ranked Compaq Computer’s share rose from 6% to 6.6%. Dell Computer made a strong move, moving from No. 11 worldwide to No. 3, with 3.5% of the $46.5-billion market.


Another indicator of IBM’s woes was its plunging sales of mainframe computers, the industry’s largest machines. While IBM remained the dominant vendor, with more than half the world market, its mainframe revenue fell a stunning 21% from 1991, to $11.8 billion, Dataquest said.

Equally ominous for IBM, mainframe sales accounted for 21.6% of all computer revenue in 1992, down from 24.9% in 1991. PCs, meanwhile, boosted their share of the $104.5-billion worldwide computer market from 41.5% to 44.5%, according to Dataquest.

A bright spot for IBM was in workstations, the small but powerful machines traditionally favored by engineers. The company’s market share rose from 15.8% to 18.4%, mostly at the expense of Digital Equipment. Sun Microsystems remained the leader in the $9-billion workstation market, with a 31.6% share.