AMD's Lowers 2Q Expectations

The Sunnyvale, Calif., chip maker said sales for the quarter ending July 2 are expected to be approximately $1.2 billion, a 9 percent decline compared to the first quarter and a 52 percent increase compared to the second quarter of 2005.

AMD previously said its earnings would be flat or slightly down form the first quarter but up about 65 percent from the prior year.

AMD said that during the quarter it had "record" sales of single-, dual- and multi-socket server CPUs and workstations, but sales of entry-level and mainstream mobile and desktop processors were down.

AMD has steadily gained market share from Intel over the past year, particularly in the server space. By end of the first quarter, AMD had grabbed one-quarter of the overall x86 market share, according to numbers from research firm Gartner.

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Intel, however, has been fighting back, particularly through aggressive price cuts this year and accelerated release schedules of new processor technology. AMD is slated to announce its earnings on July 20; rival Intel has plans to release its earnings on July 19.