INTEL, the computer-chip giant accused of abusing its market power, could face damages of more than $3.2 billion (£1.8 billion), and see its sales drop by $4.4 billion a year, according to a Wall Street analysis.

Tad LaFountain of Wells Fargo Securities estimates there is at least a 75% probability that Intel will lose the case brought last month by Advanced Micro Devices (AMD), its smaller rival. LaFountain based his judgment on the specifics of AMD’s claim, and a recent ruling against Intel’s alleged anti-competitive practices in Japan.

AMD lost market share to Intel between 2001 and 2004 — a time when, in the view of many experts, AMD’s microprocessors had established a technological lead over Intel. AMD blames the financial inc-entives Intel allegedly offered computer makers and retailers.

LaFountain has attempted to estimate the loss of sales AMD suffered as a consequence. If Intel is forced to amend its aggressive marketing practices, LaFountain estimates it could suffer a 20%-25% fall in profits — or about $2 billion a year.

He writes in his report: “We believe that the exclusivity that Intel sought with the actions described in AMD’s complaint became a drug.” He says Intel’s marketeers gained too much power over its engineers.

Intel rejects AMD’s claim. Chuck Molloy, a spokesman, said LaFountain’s estimates “are just back-of-the-envelope guesses”.

Last week, EU competition officials raided Intel’s offices as part of its own investigation into AMD’s allegations.