AMD issues revenue warning

Advanced Micro Devices Inc., the No. 2 microprocessor maker, warned Monday that it would probably miss its quarterly revenue target as it loses market share among computer resellers, a traditional bulwark of its business.

It was the second quarter in a row that AMD has shown signs of trouble as it wages a bruising price war with Intel Corp., a fight that has eroded profit at both main rivals in the $30-billion-a-year processor industry.

The two Silicon Valley combatants said they expected competitive pricing to continue this year, with Intel Chief Executive Paul Otellini hinting that he was ready to dig in his heels to stop AMD’s overall recent market share gains.

Intel’s total market share among desktop, laptop and server computers fell to 74.4% in the fourth quarter of 2006, while AMD’s rose to a record 25%, according to market research firm Mercury Research.

However, AMD said that its first-quarter revenue would fall short of the $1.6-billion to $1.7-billion target it gave in January.