When processor maker Intel (NASDAQ:INTC) announced its earnings recently, the chip giant did better than expected, giving hope to some that the recession’s disastrous effect on technology sales may be slackening. And now an analyst firm says that prognosis may get some further support from Intel rival Advanced Micro Devices’ (NYSE: AMD) earnings, which will be released on July 21.

FBR Research reports that its checks into AMD’s supply chain and PC builds have revealed the company’s fortunes may be changing. The firm’s checks with the top laptop ODMs and the top desktop motherboard makers show that PC builds for AMD grew by 7 percent sequentially for Q2, with Q3 PC builds expected to grow by another 13 percent sequentially.

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“We do think the company will report strong Q2 results and Q3 guidance on Tuesday after the market close,” the firm says in a brief report. “Our new distributor checks suggest Asian distributors had a stronger-than-expected June quarter and are more positive about Q3 shipment prospects. In addition, recent checks for AMD and the PC supply chain have strengthened.”

The firm says that demand in Asia remains robust and global PC shipments are rebounding.

More specifically, FBR Research says that recent checks with Asian chip distributors suggest that Q2 sell-through shipments grew 20 percent sequentially. That’s better than the firm’s checks from the past three consecutive months, FBR Research says. The firm adds that its Asian distributor contacts now expect Q3 chip sell-through shipments to grow 5 percent to10 percent quarter over quarter.

Further, FBR Research says that AMD’s recent production start checks have gotten better, increasing by 78 percent quarter over quarter, compared with last month’s 63 percent. Q3 production is now expected to grow 1 percent sequentially.

“We forecast AMD will generate about $160 million of free cash flow in the second half of fiscal 2010, a dramatic improvement from the significant losses we expected three and six months ago,” the firm says in a brief research note. “Although Taiwan Semiconductor's inability to produce 40 nanometer chips at adequate yields has all but eliminated AMD's time-to-market advantage over NVIDIA, we nevertheless think AMD could have a stronger second half of 2009 than investors expect.”