As AMD's Sales Slip, Intel Lurks

The U.S. auto industry may get its multibillion-dollar bailout. Hundreds of U.S. banks already have big piles of government money. But in the technology industry, by contrast, Darwinism still rules. When the economy gets tough, the strong take what they need to survive.

And with the downturn grinding up hundreds of thousands of U.S. jobs each month, Advanced Micro Devices (nyse: AMD - news - people ) is just the latest midtier tech company looking at a tough fight with a larger, better-financed rival for vanishing consumer dollars.

The U.S. auto industry may get its multibillion-dollar bailout. Hundreds of U.S. banks already have big piles of government money. But in the technology industry, by contrast, Darwinism still rules. When the economy gets tough, the strong take what they need to survive.

And with the downturn grinding up hundreds of thousands of U.S. jobs each month, Advanced Micro Devices (nyse: AMD - news - people ) is just the latest midtier tech company looking at a tough fight with a larger, better-financed rival for vanishing consumer dollars.

"We think AMD's relatively stale product offering of desktop and mobile chips means its business is faring worse than Intel's business as Intel takes share," Friedman, Billings, Ramsey & Co. analyst Craig Berger wrote in a note to investors Thursday.

Not that Intel is doing great, either. The Santa Clara, Calif.-based chip giant cut its fourth-quarter targets three weeks ago. The company, however, has used its research smarts and multibillion-dollar factories to devastate its smaller rival just as the economy has begun to sour. AMD shares have fallen more than 70% year-to-date. Intel's shares, by contrast, are down 50%.