Chip maker AMD sees strong future

AMD's share of the processor market is increasing

Shares in computer chip maker Advanced Micro Devices (AMD) have risen nearly 12% after it announced a big rise in fourth quarter profit.

Its shares were also boosted by AMD's estimate that revenues would rise 70% during the next three months, taking market share from rival Intel.

Earlier this week Intel upset investors when its fourth-quarter sales failed to meet expectations.

Its sales rose by 6% compared to AMD's 45% rise in the same period.

Legal complaints

During 2005 Intel's shares rose about 13%, while AMD's stock more than doubled.

Last year AMD filed a lawsuit against Intel alleging that it had used its market dominance to force major customers, such as NEC, Acer and Fujitsu, into exclusive deals or to cap customer purchases of AMD chips.

The lawsuit covers x86 microprocessors, used to run server and PC operating systems, including Microsoft Windows, Solaris and Linux systems.

See AMD's share price See Intel's share price

Record demand for its high-performance Athlon and Turion chips has helped AMD offset the losses it has been making in its memory chip business.

In the fourth-quarter AMD's microprocessor division increased profits to $287m from $90m the year before, while its memory chip losses widened to $62m.

For the three months up to 25 December, AMD's total pre-tax profit was $206m, up from $20m in the same period of 2004.

The 45% increase in revenues took them to $1.84bn.