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AMD seen strong this year; Intel next

AMD, the No. 2 computer processor maker, seems set to gain more market share as its bigger rival Intel struggles with a turnaround effort that is not expected to pay off until next year.

AMD's share price has fallen about 40 percent since hitting a year high in March in part because investors were worried that steep price cuts by Intel would succeed in halting its gains in market share.

However, the company appears to have weathered the worst of the cuts, and it is benefiting from an industry shift that has seen PC makers increasingly use its chips as a way to reduce their reliance on Intel.

AMD has been rapidly increasing its share of the PC processor market, to 27 percent in the second quarter from less than 18 percent a year earlier, and AMD is expected to gain more share in 2007, thanks in part to a new supply agreement with the No. 1 PC maker Dell Inc.

When AMD reports third-quarter earnings next Wednesday, it is expected to post a 50 percent rise in profit excluding special items to $115.3 million, or 23 cents per share, on revenue of nearly $1.31 billion, according to Reuters Estimates.

View: Full Article @ Reuters.com

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