The processor market is sending mixed signals, with server and mobile shipments rising while desktop CPU volumes decline amid higher system prices. Meanwhile, AMD's House of Zen has taken market share from Intel across every category.

For Q2 2026, Mercury Research says total processor shipments were lower than in the same period a year ago, attributing this to much lower system-on-chip (SoC) and embedded volumes due to AMD's declining games console business, plus a large drop in desktop CPU volumes.

Mercury associates the decline in desktop chips with weaker demand for high-end gaming PCs. Although the second quarter is not typically strong for consumer sales, it adds: "We believe that higher PC prices and limited GPU supplies are having a significant impact on end demand for desktop PCs, and thus desktop CPUs, as well."

Those higher PC prices are the result of increases in the cost of memory components due to a shortage caused by chipmakers prioritizing output of more profitable high-bandwidth memory chips used in AI servers, as The Register has been covering for some time. A shortfall in the availability of consumer GPUs appears to have much the same cause.

According to Mercury, desktop CPU shipments fell by more than 20 percent year on year, although AMD's decline was smaller than Intel's. As a result, AMD gained market share, taking nearly 35 percent of desktop chips compared with about 32 percent a year ago.

In contrast, shipments of mobile processors for laptops and tablets were up strongly on the previous quarter, running counter to Mercury's earlier expectations, although there was only a modest increase compared with a year ago.

The growth followed a sharp increase in Intel's output, particularly of mobile chips, after two heavily supply-constrained quarters. Intel added millions of units of mobile CPU capacity during Q2, significantly narrowing the gap between supply and demand.

However, AMD's share of this mobile segment is now up to nearly 29 percent, a significant increase from the 20.6 percent it stood at in the same quarter a year ago.

Server processor shipments also rose, increasing 20 percent year on year and more modestly from Q1. According to Mercury, demand was higher for both datacenter-class CPUs (Xeon SP and AMD Epyc) and chips aimed at networking and storage applications.

Once again, AMD gained market share, accounting for 34.5 percent of server processors compared with 27.3 percent a year ago. Mercury adds that if the calculation included only Intel Xeon SP and AMD EPYC chips, AMD's share would reach 46.4 percent.

The research firm also keeps an eye on the Arm-based CPU market for PCs and servers, with the usual caveat that its estimates have significant uncertainty as there is no centralized reporting of Arm server or client CPU revenues.

It recorded significant growth in Apple's Mac products, including the new lower-cost Neo line, while Arm-based Chromebooks also posted strong gains.

Mercury estimates that Arm-based systems captured 15.3 percent of the client market in Q2 2026, up 0.9 percentage points to a record high. In servers, it estimates that Arm's share reached a record 13.6 percent, up 0.5 percentage points. ®