Despite a rough start this year, a new report released by Mercury Research indicates that AMD rebounded in the second quarter to gain back 4 percent of the x86 processor market share that it lost to rival Intel earlier this year.

According to the report, AMD's market share stood at 22.9 percent for the second quarter of 2007, compared to 18.7 percent in the first quarter. Intel, in comparison, saw its market share slip from 80.5% in the first quarter to 76.3%. Apparently, an overstated share of the market in the fourth quarter last year and an understated share in the first quarter 2007 is what caused AMD’s market share variation:

The Sunnyvale, Calif., company appears to have overestimated demand in the fourth quarter of 2006 and shipped more processors to OEMs and channel partners than were needed. In the first quarter of 2007, these OEMs and channel partners used the leftover processors and did not order additional chips from AMD. By the second quarter, the company restored its balance and shipments matched demand, which helped boost AMD's market share back up.
Overall, the chip market had a strong second quarter, with all three major segments — mobile, desktop and server — seeing double digit growth, according to the report.