When it comes to buying a windows-based laptop or PC, consumers are faced with only two real choices for CPU (the central microprocessor, or 'brains' of the computer) maker: Intel Corp (INTC​​) or Advanced Micro Devices Inc. (AMD). Both companies were founded nearly 50 years ago in what has become the silicon valley part of California, yet in half a decade no other major player has been able to enter this segment of the semiconductor market. We'll take a look at the history of competition between Intel and AMD and try to explain why AMD has been, and remains, Intel's only real competitor.

AMD and Intel: A Brief History

According to current industry statistics, AMD is the second largest supplier of microprocessors in the world, yet quite far behind Intel. AMD controls around one quarter of the CPU market, while Intel dominates more than 70%. In fact, AMD has always played second fiddle to Intel both in market share and in share price. Both companies were created around the same time, nearly five decades ago. Intel was co-founded in mid-1968 by Gordon Moore, known for formulating Moore's Law and by Robert Noyce, who helped invent the silicon integrated circuit. Both men were former employees of Fairchild Semiconductor, an early and influential pioneer in integrated circuit technology.

AMD was founded a few months later in 1969 also by eight former employees of Fairchild Semiconductor. The two companies have therefore a shared lineage and similar origins. Since then, they have been fierce competitors, both trying to one-up each other with the latest technology and most powerful processors to run the world's computers. However, with the development of the x86 chipset in the late 1970's, Intel soon became the dominant player, with its share value growing by an incredible 290x since its IPO in 1978. AMD, which IPO'd in the same year has seen its shares only grow by just 2.7x over the same long period—a difference of a factor of 100. (For more, see also: Top 5 Semiconductor ETFs for 2017.)

AMD has been the persistent underdog in the semiconductor space, but it has still endured, with the two companies effectively shutting out any other competitors. Intel has tended to dominate all sectors of the CPU market, including high-end performance processors, while AMD has focused on lower-cost, budget-friendly middle- and low- range chipsets. Intel chips are also more stable and easy to use for the average computer user, while AMD's chips can be over clocked and tinkered with for those sophisticated users who know their way around a circuit board.

Outside Competition Has Come and Gone

The reader could get the impression that Intel and AMD are the only computer processor manufacturers that matter. While this may be true for windows-based computers, it is not true in general. For example, Texas Instruments Inc. (TXN), Qualcomm Inc. (QCOM​), ARM Holdings (AR​MH) and Broadcom Limited (AVGO​) all make central processors; however, these companies have specialized in other segments of the consumer electronics market and have shied away from PCs. For example, these manufactures supply the brains for many of the world's smart phones and tablets. Apple Inc.'s (AAPL) iPhone has made use of processors designed by Samsung and Taiwan Semiconductor (TSM). Meanwhile, Intel and AMD have focused on the PC and PC-gaming (including video graphics cards, or GPUs).

Historically, there had been some vibrant competition in the PC chip space, competing directly with Intel's x86 architecture. These companies have all since gone out of business or forced out of the CPU market. Cyrix was one such company, which began by marketing so-called co-processors that were combined along with Intel 286 and 386 CPUs. Cyrix eventually started designing their own chipsets to compete with those primary processors in the early 1990's, grabbing up to 10% of the market share.

Unfortunately, Cyrix consistently found itself late to market behind upgrades offered by Intel and AMD and could not compete on raw performance. The company was sold to National Semiconductor in 1997 and stopped making x86 chips altogether soon after. VIA Technologies purchased some of the intellectual property of Cyrix from National Semi in an attempt to break into the x86 market but also failed to gain any traction. (For more, see also: AMD Enters High-End PC & Server Market.)

In the late 1990's Integrated Device Technology (IDTI​) introduced the WinChip, a low-power alternative to compete with x86 platforms. Intended for office use, the WinChip failed to perform when carrying out floating-point calculations and subsequently failed. IDT went on to specialize in chips meant for communication and RFID applications. Only AMD and Intel remained as of the early 2000's by a substantial measure.

The Future

Recently, AMD has made a push to challenge Intel with its new Ryzen chip architecture, which has so far seen some success as a more affordable alternative to high-end CPUs. In fact, over the past 12 months, shares of AMD have seriously outperformed Intel. However, it is likely that Intel will respond to this challenge by releasing its own new and improved next-generation processors as the two companies duke it out into the future. In all likelihood, Intel will remain dominant with AMD a distant second. Still, that distant second is also likely to be the only real competition that Intel has in the PC-centered CPU market.