Chipmaker

Advanced Micro Devices

(AMD) - Get Report

confirmed Wednesday that it had lowered its list prices across the board on Monday, just a day after industry giant

Intel

(INTC) - Get Report

cut prices on its fastest

Pentium 4

chips.

Talk of a

price war between the two companies has been increasing as AMD has eaten into Intel's market share for microprocessors. In the first quarter, AMD picked up 4 percentage points of the market share that had previously been Intel's, bringing its total to 21%. Intel's ended the quarter at 77%. Microprocessors are the brains in personal computers and have experienced the same decline in demand as PCs.

AMD CEO W.J. "Jerry" Sanders III said just two weeks ago on the company's earnings conference call that he was prepared to fight Intel and meet its lower prices. But on Wednesday during a technology conference he played down the possibility that the two companies would wander into such a battle.

"We're not looking for a price war. We don't expect a price war," Sanders told investors at the

Merrill Lynch Hardware Technology

conference in New York. Instead, he said, AMD would price competitively based on performance. AMD says that its fastest chips compete with Intel when it comes to performance, even though they may not be at the same gigahertz level.

AMD said that its fastest 1.33-gigahertz

Athlon

introduced on March 22 at $350 now lists for $253, a 28% decline. The 1.3-gigahertz Athlon sells for $230, down by 27%. The 1.2-gigahertz Athlon was lowered 25% to $219 from $294, and the 1.13-gigahertz Althon is now at $197, also down about 26%. The company's so-called value chips also were lowered, with the 900-megahertz

Duron

falling to $115 from the $129 it debuted at on April 2.

Intel executives said last week during a meeting with analysts in New York that they are pricing the Pentium 4 aggressively so the company can ramp up production and move it into the "sweet spot" for demand. The company introduced its 1.7-gigahertz Pentium 4 at $352, about 50% less than where it would normally launch its fastest chip.

On Sunday, Intel lowered the price on the 1.5-gigahertz Pentium 4 by 51% to $256 from $519 effective April 29. It also cut the 1.4-gigahertz Pentium 4 to $193 from $375, a decline of 49%, and it trimmed the price on the 1.3-gigahertz Pentium 4 to $193 as well, 28% less than the $268 it cost before. Those chip prices were last lowered by a range of 11% to 20% on April 15.

The list prices based on 1,000 units are different than the actual prices that vendors often pay because of discounts they receive for buying in volume.