(Recasts; adds details, share movement)

June 27 (Reuters) - Needham cut its rating on O2Micro International Ltd (OIIM.O: Quote, Profile, Research) by a notch to "buy," saying the power management and security systems provider is likely to lose market share due to rising competition.

Shares of the company fell nearly 14 percent to $6.33 in afternoon trade on the New York Stock Exchange.

"Rohm Co Ltd (6963.T: Quote, Profile, Research) and to a lesser extent Microsemi Corp (MSCC.O: Quote, Profile, Research) have been gaining traction in the LCDTV market relative to O2Micro's dominant position," said analyst Vernon Essi in a note to clients.

The analyst expects O2Micro, which generates majority of its revenue from sales of its products used in LCD television, to see margin pressure in the longer term as it could face pricing issues due to competition.

He, however, feels a refreshed product line with more functionality could help the company win back market share.

Essi cut his price target by $4 to $11 on 02Micro's stock, which he had previously rated as "strong buy."

He trimmed his 2008 earnings estimates on the company by 5 cents to 59 cents a share and cut 2009 estimates to 70 cents from 87 cents a share. (Reporting by Lalitha Murali in Bangalore; Editing by Anil D'Silva) ((lalitha.murali@thomsonreuters.com;within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters messaging: lalitha.murali.thomsonreuters.com@reuters.net))