SAN FRANCISCO – Worldwide sales of microprocessors used in PCs and data-server networks should rebound in 2007 after a price war between Intel Corp. and Advanced Micro Devices Inc. stunted growth last year, spurring the first yearly decline since the Internet bubble burst, one industry researcher is forecasting.

Technology research firm iSuppli on Tuesday estimated global microprocessor revenue in 2007 will climb to $35.4 billion, a gain of 10.8 percent over its current estimate for 2006.

It forecasts 2006 microprocessor sales will decline 6.6 percent to $31.9 billion. The last time microprocessor sales declined on a year-over-year basis was 2001, when revenue plunged 25 percent, according to iSuppli. Typically, microprocessor sales grow at an 8 percent clip on average.

“Vendors have had enough of the blood bath,” said iSuppli analyst Gary Grandbois. “We think microprocessors will bounce back.”

Intel and AMD, rivals in the production of chips used in PCs and servers, have been locked in a heated battle the past year. In 2006, Intel was forced to cut prices on its PC chips as its inventories swelled. The markdowns forced AMD to cut prices on some of its chips as well.

Some industry forecasters expect PC sales to pick up this year with release of Microsoft Corp.’s new Windows operating system called Vista. In the past, businesses and consumers have purchased new computers when Microsoft sold a new software operating system.

AMD, of Sunnyvale, Calif., has said it plans to grow at twice the industry’s rate this year.

At its analyst day Dec. 14, AMD forecast its computer-chip shipments will rise 20 percent, twice the rate it estimates the industry will grow. It also predicted a kinder price environment for PC chips.

Santa Clara, Calif.-based Intel, the world’s No. 1 chipmaker, has not offered a shipment forecast.

Microprocessor revenue declined last year as much of the semiconductor industry grew.

In 2006, iSuppli is forecasting global semiconductor sales will come in at $258.5 billion, growth of 9 percent. For 2007, it estimates sales will expand to $285.8 billion, a 10.6

percent rise.