Chip maker Advanced Micro Devices Inc. has warned that its second quarter sales will be 9 percent below the first quarter, a sign that sharp price cuts by rival Intel Corp. are beginning to do some damage, The Wall Street Journal reported Friday.

AMD, the No. 2 microprocessor maker after Intel Corp., estimated that it will report revenue for the quarter of 1.22 billion U.S. dollars.

That is 52 percent higher than the year-earlier quarter, excluding revenue from a memory-chip business that was spun off, but 9 percent lower than the first quarter, according to the report.

The company was quoted as saying that it expected sales to be " flat to slightly down" from the first period.

The Sunnyvale, Calif., semiconductor maker has been taking sales lately from Intel, which has historically accounted for about 80 percent of unit sales and 90 percent of revenue in the market for chips that serve as the calculating engines for computers.

Intel has been counterattacking on several fronts. The Santa Clara, Calif., chip maker has slashed prices on existing products while unleashing a salvo of products, including three models arriving by August.

AMD said it experienced "record" second-quarter sales of its Opteron chip, which is used in server systems. Sales of microprocessors for entry-level and mainstream mobile-and-desktop personal computers were down, AMD said.

Apjit Walia, an analyst at RBC Capital Markets, noted that Intel and AMD have suffered from declining computer demand. Intel's decision to cut prices has won back some sales, while forcing matching cuts from AMD. The drop in prices is hurting revenue and profit at both companies.

"It's mostly pricing," Mr. Walia said. "That is really hurting them."

Source: Xinhua