Tiburon (CA) – More headaches for AMD: Intel’s Core-based Xeon processor has reclaimed virtually all market shares the company had lost to AMD between Q3 2005 and Q2 2006.

According to a report released by Jon Peddie Research (JPR), the workstation market continued to show healthy 15.2% year-over-year growth in the first quarter of this year, resulting in 674,000 units shipped. Segment revenue increased by 15% to about $1.7 billion.

However, it was just Intel that was able to take advantage of that growth, expanding its presence in the market to a level that we have been used to several years ago. According to JPR, Intel claimed a 92.0% share during Q1, up from 88.9% in Q4 2006, up from 89.1% in Q3 and up from 86.7% in Q2. AMD in turn, dropped from 13.3% to 8.0% in the same time frame and is almost back to a market share level that was recorded by JPR for Q3 2005 (6.6%).

“We’d expected AMD’s share to moderate or level off by the time Intel improved its dual-socket Xeon platform in mid ’06, but we hadn’t anticipated the decline we’ve seen,” said  JPR analyst Alex Herrera. “The extent of Intel’s rebound will put that much more pressure on AMD to deliver quad-core Barcelona soon - and with better performance than Xeon.”