Advanced Micro Devices (NYSE: AMD) gained ground in its ongoing battle with chip rival, Intel (Nasdaq: INTC) in the most recent quarter, continuing to capture unit share, but slipped in terms of revenue.

Latest data from Mercury Research group shows that AMD's processors now account for 25 percent of the total processor market, the highest it has ever been. The Sunnyvale Calif.-based company is up from 23.3 percent in the third quarter and 21.4 percent in the same quarter last year.

In the desktop segment, AMD took more market share from Intel during the quarter, growing by 13 percent. Intel only grew 1 percent in comparison. AMD’s unit market share in the segment reached a record high, at 29 percent, with growth primarily driven by dual-core processors, according to Merrill Lynch analyst, Joe Osha.

However, Intel did not lose as much ground in terms of revenue, he explained in a research note, as it appears that a favorable mix shift allowed Intel’s blended ASP [average selling price] for the desktop segment to increase slightly.

The smaller chip maker also gained ground in the mobile processor segment, which powers virtually all of today's notebook computers. While Intel’s growth was strong, AMD’s shipments grew 40 percent, and its unit share increased to 19.4 percent.

The notebook market seems to be seeing the least pricing pressure, as ASP for Intel and AMD were both flat [quarter-over-quarter], Osha said.

The real story was in the server market, where high-performance processors that power data-centers and workstations yield the highest revenues for the two chip manufacturer.

Intel lost share in both desktop and notebook markets, but its revenue share in the

server market increased sharply, according to the Merrill analyst.

With the volume shipment of Intel's Woodcrest, server-grade processors, the chip-giant saw its average selling price skyrocket by 30 percent. As a result, Intel’s revenue share increased from 70 percent in the third quarter to 83 percent in the fourth, despite unit-share remaining virtually the same.

As a whole, Intel pulled ahead in market revenue, seeing its average selling price increase 7 percent to $130 per chip. While AMD was able to increase its shipments, its selling price dropped 13 percent to $75 for the quarter.