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UPDATE 1-Chipmaker AMD forecasts quarterly revenue below Street view, shares fall

fall@ (Adds estimates, revenue, background)

July 30 (Reuters) - Advanced Micro Devices Inc forecast third-quarter revenue below Wall Street estimates on Tuesday, as the U.S. chipmaker sees lower demand for its chips used in gaming consoles, sending its shares down 7% in extended trading.

AMD expects revenue of about $1.8 billion, plus or minus $50 million. Analysts on average had expected revenue of $1.95 billion, according to IBES data from Refinitiv.

The chip industry is in a slowdown, with research firm Gartner forecasting a 9.6% drop in global semiconductor revenue in 2019 to $429 billion. U.S.-China trade tensions, including tariffs on some products and the restrictions on sales to Huawei, are pressuring chipmakers.

AMD said sales in its graphics and computing business fell 13% to $940 million, missing FactSet estimates of $983 million due to lower graphics channel sales, partially offset by increased client processor and datacenter graphics processing units sales.

AMD's gaming chips will feature in Microsoft's next-generation Xbox console as well as Sony's PlayStation 5.

The company's net income fell to $35 million, or 3 cents per share, in the second quarter ended June 29, from $116 million, or 11 cents per share, a year earlier.

Excluding items, AMD earned 8 cents per share, in-line with analysts estimates.

Revenue declined 12.8% to $1.53 billion. Analysts on average had expected revenue of $1.52 billion, according to IBES data from Refinitiv. (Reporting by Arjun Panchadar in Bengaluru; Editing by Sriraj Kalluvila, Bernard Orr)