The news comes as a huge blow to Intel, which benefited greatly from the exclusive arrangement. High-end server systems, which require four chips each, are a sore spot for Dell because they have been losing market share by relying solely on Intel, the Wall Street Journal reported.
“It’s clear that this is where Dell has been hurting the worst and by extension where Intel has been hurting the worst,” an analyst at Endpoint Technologies Associates told the WSJ.
The move for Dell comes amid years of speculation by the computer giant that it would seek to integrate other chipmakers into their PCs and server systems. Experts say AMD has stepped up the quality of its chips and have recently become more technically advanced than Intel.
Dell has faced stiff competition and also disclosed lower earnings for the company’s fiscal quarter. It’s net income dropped $172 million from the same quarter last year.
AMD’s stock spiked 35 cents after the announcement, while Dell posted a 32-cent gain.
Hewlett-Packard, IBM and Sun Microsystems all offer AMD chips in its machines. That factor, combined with Dell’s market-share loss has led the company to seek new relationships, analysts believe.
While high-end server systems don’t penetrate the consumer marketplace, or sell in immense numbers, “those systems sell to a demanding audience of corporate buyers that AMD is now successfully courting with a chip called Opteron,” the WSJ said.