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Dell turns back on AMD

CEO Rollins says computer maker probably won't use AMD chips after all

After months of public flirtation with AMD, Dell's CEO has made a U-turn, telling financial analysts that Dell doesn't expect to offer servers or PCs based on AMD's chips in the near future.

The statement, for now, puts to rest speculation that Dell would end its reliance on a single company for processors. Since Kevin Rollins became Dell's CEO last July, he has steadily dropped hints that Dell might consider adding servers based on AMD's Opteron processor to its product lineup, which is currently based exclusively on Intel's Xeon and Itanium 2 processors.

Dell did consider AMD's technology during 2004, which was one of the more tumultuous years in Intel's recent history, Rollins said on Wednesday. In the last 12 months, Intel was forced to copy AMD's philosophy of bringing 64-bit extensions to the x86 processor, scrap two future processor cores, and fix several manufacturing and design glitches across a wide variety of products.

"For a while Intel admittedly had a technological slip, and AMD had made a step forward," Rollins said.

"We believe that Intel acknowledged the challenges… and have been steadily improving their technological road map vis-a-vis AMD," Rollins said. "They're starting to put customers a bit more at ease that they don't have to make a switch. So now it's looking like 'No.' For a while it was looking like 'Yes,'" he said.

Veteran industry watchers have seen the Dell/AMD relationship heat up and cool down for years. Dell is believed to receive discounts on Intel chips as a result of its continuing loyalty to the world's largest chip maker. The company is also thought to occasionally toy with the possibility of using AMD's chips in order to keep Intel alert.

In a July interview last year, the week Rollins took over the CEO role, he declined to comment specifically on that issue. He did say that his company's relationship with Intel "makes us a lot of money".

In that same interview, Rollins also said, "We're not an Intel division. So we'll look at [AMD's] products, and as soon as customers like them and the market grows, and there's a clear trend, the technology is stable, the volume is there, yeah, we'd switch, or we'd add them. We don't have any objection against it."


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