WASHINGTON, Jan. 16 (Xinhua) -- U.S. chip giant Intel Corp.'s fourth-quarter profit fell 39 percent as the company lowered prices to compete with Advanced Micro Devices Inc (AMD), Bloomberg News reported on Tuesday.

    Earnings dropped as Intel fended off Advanced Micro with price cuts and started manufacturing new chips to win back orders, said the report.

    Andy Bryant, Intel's Chief Financial Officer, forecast the gross margin to narrow to about 50 percent this year, slightly less than analysts' estimates, and said he expects a "continued competitive environment."

    The AMD, Intel's sole rival in the market for personal-computer processors, also reported last week that its fourth-quarter profit and sales were hurt by lower prices.