CPU Market Contracts as AMD and ARM Secure Larger Shares

The global CPU market experienced a downturn in the first quarter of 2026, with a decrease in overall processor sales outside of the server sector. According to data from market research firm Mercury Research, server processor shipments increased by approximately 10% year-over-year, contrasting with significant declines in sales for CPUs used in notebooks, desktop PCs, gaming consoles, and embedded systems.

Within the x86 processor segment, AMD expanded its market position at the expense of Intel. AMD's share of all x86 CPUs rose from 27.1% in the first quarter of 2025 to 32.6% in the same period of 2026, reflecting a gain of 5.6 percentage points over the year. Segment-specific analysis reveals that AMD's x86 server processor market share climbed notably, reaching 33.2%--an increase of six percentage points compared to the previous year. In the desktop PC market, AMD's share improved by 5.1 points to also reach 33.2%, although this figure represented a decline from the fourth quarter of 2025, attributed in part to supply chain fluctuations.

Mercury Research highlighted that the desktop CPU sector was particularly affected by inventory corrections. Due to heightened memory (RAM) shortages in late 2025, many PC manufacturers accumulated higher inventories of both RAM and processors, which subsequently led to a 20% drop in desktop CPU shipments in the first quarter of 2026. As a result, while AMD made gains in annual terms, quarter-to-quarter figures reflected some volatility.

Absolute unit numbers for processor shipments were not disclosed by Mercury Research in their public reporting. However, the data indicated that growth in server processor volumes is largely driven by the rising demand for high-performance CPUs in the expanding field of agentic artificial intelligence systems. Such systems require substantial processing power, which has fueled investment in server infrastructure and contributed to the sector's resilience amid wider market contraction.

The demand for server processors has led Intel to reallocate production resources toward this segment, resulting in reduced availability of specific desktop and notebook CPUs. This shift in manufacturing priorities underscores the influence of AI and data center growth on broader semiconductor industry dynamics.

ARM-Based CPUs Gain Traction

ARM architecture processors also saw increased adoption, particularly in notebooks and servers. Mercury Research estimated that ARM CPUs accounted for 14.4% of the client computing device market--a sequential gain of 0.5 percentage points. This estimate covers Apple MacBooks, Google Chromebooks, and other ARM-powered devices. While specific figures for Qualcomm's Snapdragon processors in Windows 11 notebooks were not made public, the trend reflects steady momentum for ARM within the client segment.

Server processors based on ARM cores experienced substantial year-over-year growth, with unit shipments roughly doubling, especially due to strong sales of Nvidia's 'Grace' CPUs in AI-focused systems such as the Blackwell NVL72. Despite this rapid expansion, ARM-based server CPUs now represent a moderate 13.2% share of the total server processor market. This figure increased, but at a slower rate, because x86 server processor volumes also rose significantly during the same period.

Overall, the competitive landscape in the CPU sector is evolving. AMD is gaining prominence in x86 processors, particularly in servers and notebooks, while ARM architectures continue to make measured inroads, driven by innovation from companies like Apple and Nvidia. The market is also being shaped by ongoing supply chain adjustments and the burgeoning requirements of artificial intelligence and data center applications.