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"We strongly believe that Dell will start AMD-based system shipments as early as (the second half of 2006)," Santiago wrote in a report. He based his view on conversations with unnamed sources in the PC component supply industry, press reports indicating Asian designers are working on AMD-based systems for Dell, AMD inventory shortages suggesting Dell is purchasing the chips and other factors.
At the moment, Dell uses Intel chips only. Chairman Michael Dell told reporters last week at the Consumer Electronics Show that adding AMD processors to the product line "is a distinct possibility."
Santiago also wrote in the report: "Our conversations further indicate that Dell's sales force is demanding Opteron-based server offerings to be able to better compete in the market."
Intel and AMD have been fierce rivals for years, but AMD has made strong gains in the server market at Intel's expense. AMD's Opteron caught on as a competitor to Intel's Xeon because of its lower power consumption, early support of 64-bit memory extensions and dual processing cores, built-in memory controller and high-speed connection to the rest of a system.
Santiago upgraded AMD stock from "market perform" to "outperform," estimating that a Dell deal will bring in $144 million in revenue and 12 cents earnings per share in the second half of 2006, and $597 million and 49 cents per share in 2007.
Dell's three main competitors in the server market--Hewlett-Packard, IBM and Sun Microsystems--all use Opteron in their servers. In addition, HP uses AMD chips in its PCs and laptops.
Dell has come close to using AMD
chips in the past, but in 2005,
Dell declined to comment on what it termed "rumor and speculation." "We're constantly evaluating technologies and providing customers with the technology they're requesting," said spokesman David Lord.
AMD's stock rose $1.68, or 5 percent, to $34.93 on Tuesday. Santiago raised his price target to $45.
Santiago believes manufacturing capacity from AMD's new Fab 36 plant will increase the confidence Dell and other computer makers have in the chipmaker.
Despite that, Intel has some formidable advantages. For example, it leads AMD in the transition to processors made with smaller, 65-nanometer circuitry features. Intel began its transition in October, but AMD won't begin its until the second half of 2006. The newer process lets Intel exert heavy price pressure on its competitors.
In November, Dell began selling individual AMD processors on its Web site.
See more CNET content tagged:
AMD, AMD Opteron, Dell, chip company, Intel
No surprise on the unnamed sources part.
"press reports indicating Asian designers are working on AMD-based systems for Dell"
The sources are so secret they can't be named but they issued press reports?? Besides, if it is true I am sure Dell already knows who they gave this contract to.
I heard the same thing a while back as well. I presume "working on AMD-based" means designing AMD motherboards? If so, why would it take so much time?
Maybe Dell is finding it harder to keep Intel believing they might actually switch to AMD and really mean it this time, so they paid some company to do some refrence designs because they needed to make their case more convincing?
"AMD inventory shortages suggesting Dell is purchasing the chips and other factors."
So they won't even be into production till the second half of 2006 at the earliest by they are _all_ready_ buying so many chips AMD can't keep up with demand? Given how much the CPU landscape changes in performance and value in even 3 months time wouldn't buying processors ~9 months before you plan to ship them be a pretty stupid thing to do?
Kevin states in that article: "Intel's got a better road map coming up, in terms of performance and in terms of thermals in the coming year, so that's been very encouraging for us,"
So, 7 days ago eWeek ran a story that Dell is pretty much planning to stick to Intel fir at least the rest of the year and the statements from Dell pretty much confirm that.
So in H2 of 06 when Rollins is asked why they shipped AMD systems anyway what is he going to say? "Well, I was just trying to throw you off, or something"
I don't think so. Looks like yet another AMD/Dell false alarm to me.
AMD quality & reliability has come a long, long way in the past few years, once they stopped trying to merely produce slight cheaper knockoffs of Intels offerings and started developing their own technology they saw a marked improvement in reliability and have been slowly improving their reputation among corporate customers. Where once it was almost exclusively gamers and the lowest end "consumer" PC buyers that AMD catered to now they are gaining significant acceptance in the mainstreem.
Personally I've had a very strong aversion to AMD after seeing ridiculous DOAs and thermal failures in the late 1990s but even I am starting to consider one of their 64-bit systems for my next personal PC purchase.
As the PC industry moves to 64-bit AMD is in a great position as they have a significant technological lead over Intel in this area.
Really the last place where Intel leads, at least technology wise is in the mobile marketplace, but that too will eventually go 64-bit and Intel won't be able top continue to use the venerable Pentium M (aka modified Pentium III) anymore.
Right now it seems my only 2 real options are alienware and Dell.
- go Dell!
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