Following Intel Corp.’s release of Intel Pentium 4 processors 600-series as well as yet another lineup of Intel Xeon DP, the world’s largest computer maker Dell Inc., who exclusively use Intel’s microprocessors in its products, said the company does not have plans to introduce systems powered by chips from Advanced Micro Devices.

Dell Says “No” to AMD

According to a report from Reuters, speaking to investors at the Goldman Sachs Technology Symposium in Phoenix, Arizona, Dell CEO Kevin Rollins said that Dell had been considering turning to AMD as a second source of central processing units (CPUs). However, at this point the company is no longer mulling to use processors from Advanced Micro Devices in its computers.

Mr. Rollins said his company’s customers and key Wall Street analysts had begun demanding that Dell start offering PCs based on AMD chips after desktop processors from the latter not only beat Intel Corp.’s Pentium 4 in terms of performance in a lot of applications, but also offered features, including 64-bit capability and power-saving technology that were absent in Intel’s products. AMD’s Opteron processors also managed to beat Intel’s Xeon chips in server and workstation benchmarks. Intel had not had a response to AMD Athlon 64 for about 1.5 years and a number of customers could consider switch to CPUs from AMD.

“We believe that Intel has responded… That is now beginning to put customers more at ease that they don’t need to make a shift (to AMD),” Kevin Rollins is reported to have said.

AMD supplies processors to other leading makers of computers, namely HP, IBM, Sun and others. But for AMD any additional revenues from its profitable processor business are badly needed to compensate the company's flash business.

Former Plans Denied

“My guess is we’re going to want to add that [AMD] product line in the future…They’ve been getting better and better. The technology is better. In some areas they’re now in the lead on Intel. That is what is interesting us more than anything,” said Kevin Rollins, Dell’s CEO in an interview with a web-site in late 2004.

Historically Dell has been using microprocessors only from Intel Corporation. However, with the availability of AMD Athlon processors in 1999 and 2000, rumours about Dell’s presumable intentions to get AMD-based computers on the market became very intense, but the real condition of the things is that there are still no computers from Dell with AMD chips inside. As a major customer of Santa Clara, California-based Intel, Dell reportedly receives some favours from its main chip partner, therefore, this is quite natural for Dell not to use processors from other makers. Moreover, being a company concentrated mostly on corporate and SOHO markets Dell once said that the demand for AMD central processing units from its clients is not too strong. Now the company cites AMD’s inability to supply the PC giant enough chips for desktops and believes it is more likely to deploy AMD’s chips into server, workstation and gaming desktop spaces.

However, one of the issues for Dell to switch to AMD was the latter’s presumable inability to supply enough microprocessor for the PC giant.

“If we basically sucked up all of AMD’s [manufacturing] capacity it would not be enough. They don’t have enough capacity for us to use them on the desktop. For us, fundamentally, AMD is much more interesting in the server, workstation or gaming arenas,” Mr. Rollins explained.

"That's looking like ‘No’… For a while it was looking like ‘Yes’,” Mr. Rollins said of Dell's decision not to use AMD.