Despite its recent success and market share gains, AMD remains vulnerable in the microprocessor price war with Intel and inventory corrections.

The company today updated its revenue expectation for the second quarter to about $1.215 billion, which would be a 52% increase over the second quarter of Q2 2005, but a 9% decline over the first quarter. During the Q1 2006 earnings conference call, the company said that Q2 revenues are estimated to remain flat over the Q1 result ($1.33 billion).

AMD said that Q2 was yet another quarter of record Opteron processor sales for servers and workstations with single-, dual- and multi-socket configurations. However, sales of entry-level and mainstream mobile and desktop processors declined over Q1, AMD said.

Last week, the Semiconductor Industry Association (SIA) mentioned in its June sales report that overall microprocessor revenues were down about 2% sequentially, which the organization attributed to "both robust competition and some inventory corrections."