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Dell to use AMD Chips in Desktop PCs
bain writes "MarketWatch reports that Dell has decided to use AMD chips in its Dimension desktops due next month. The move to use AMD chips signals a break from its long standing reliance on Intel chips. The information slipped out of Dell's quarterly earnings report." From the article: "Before the announcement, which had been speculated in the financial community and the press, Morgan Stanley analyst Mark Edelstone wrote in a research note: 'It should have a negative impact on Intel and it could be a large offset to the expected benefits from Intel's restructuring efforts.' AMD, which has become a more formidable competitor to Intel, has been expanding its manufacturing capacity, a sign that it expects to be shipping more chips. Its chief goal is to put itself in position to supply 33% of the global microprocessor market by 2008. "
Well we have already been seeing some huge innovations. Chip innovations stumbled for a few years for two reasons. Intel had a virtual monopoly, chips were reaching their theoretical speed limit and Intel didn't seem to see anyway to improve them except ramping up the Ghz and putting a bigger heatsink on it.
Considering the new Intel chips coming out now (Core 2 Duo) seem to be destorying AMD performance wise, this would seem to be a price based decision on Dell's part. They are (for the most part) a discount hardware vendor so the recent, aggressive price cuts from AMD must have been too appealing for them to ignore.
Also, ever since they introduced AMD on some of their servers it's seemed only a matter of time before that relatioship transfered to their desktop offerings. I would imagine, though, that their notebook lines will continue to use Intel as Intel continues to have the (perceived?) lead in that market.
Although the article mentioned that AMD is increasing its capacity to produce chips, I have to wonder how supplying Dell is going to impact the little guy. Are there enough chips to go around for everyone? Will NewEgg and others start having shortages? The Enthusiast has always been in AMD's corner. With Intel releasing its new processors that run circles around AMD offerings and the potential for there to be shortages in the after-market, I have to wonder if AMD is trading one customer base for another.
I hope the progress for AMD will now be volume -> cash -> more R&D - > better products.
Over the years, I've gotten the vague feeling that AMD has better engineers who can do more with less. I hope the new volume will not only allow AMD to gear up the foundries, but all expand their R&D. I don't know the real figures, but I've always suspected the Intel has a lot more money to spend on research and development, and they still are only now starting to pull ahead on performance. I hope this deal will give AMD enough money to ramp up their R&D.
If AMD could be competative with a smaller program, consider what the should be able to do with more money.