AMD share gain greater than expected

SAN FRANCISCO (Reuters) - Advanced Micro Devices Inc (AMD.N) gained 2.5 percentage points of the worldwide microprocessor market last quarter, iSuppli Corp said on Tuesday, a much greater gain than the research group had estimated.

Intel Corp (INTC.O), AMD's bigger rival, lost 2 percentage points of market share compared with the previous quarter in iSuppli's final second-quarter microchip revenue market survey, compared with a July estimate of a 0.5 point gain.

AMD's revised estimated advance, up from iSuppli's July estimate of 0.5 percent, gave it a 13.4 percent share of overall microprocessor revenue in the second quarter, while Intel had 78.8 percent, iSuppli said.

AMD's gain, made amid declines in average selling prices, was due to increased shipments of microprocessors for notebook and desktop PCs and server computers used by businesses.

AMD's gain ended Intel's three-quarter market share advance, iSuppli said. AMD's share fell nearly 6 points from 16.8 percent in the third quarter of 2006 to 10.9 percent in the first quarter of 2007 amid a bruising price war between the two market leaders.

"Conditions in the microprocessor market now are dominated by severe pricing pressure," iSuppli said in a statement. "AMD and Intel are continuing to react to each others' pricing. Because of this, the aggressive pricing environment is expected to continue throughout 2007."

AMD said in June it aimed to reverse its market share slide in the $40 billion processor industry by the end of this year.

(Reporting by Philipp Gollner)