Yesterday, Piper Jaffray research analyst Les Santiago released a research note that said he strongly believed Dell would begin shipping AMD-based systems as early as the second half of 2006.
Santiago’s speculation was based on unnamed sources in the PC supply chain and on distributor comments noting shortage of AMD processors due to the possibility of Dell building AMD processor inventory, he said.
Dell’s sales force is demanding Opteron-based server offerings to be able to better compete in the market, Santiago said.
This seems plausible, given that Dell, an Intel-only shop, is alone among its rivals. Hewlett-Packard, IBM and Sun Microsystems all currently offer servers with Opteron processors.
A Dell spokesperson declined to comment on Santiago’s claims.
Michael Dell said at last week’s Consumer Electronics Show in Las Vegas there was a distinct possibility of shipping AMD-based systems. He had made similar vague comments about Dell warming up to notion of AMD machines late last year.
When pressed about Dell’s recent comments, the spokesperson replied that the company has been consistent in constantly developing new technologies.
Advanced Micro Devices Inc spokesperson Dave Kroll also declined to comment on AMD-Dell speculation. He confirmed that Dell was not currently an AMD processor customer.
Some insiders say that Dell has had AMD-powered machines in development in its labs for a number of years.
To date, Dell has exclusively sold Intel-run made-to-order machines. Last fall, the company befuddled the industry when it began selling stand-alone AMD silicon on its web site. At the time, Dell would only say it was meeting customer demand and has not provided any additional information since.
Given that Round Rock, Texas-based Dell seems to have flirted with AMD-powered machines for a number of years, there was not clear evidence that 2006 would be any different.
Still, AMD’s Kroll pointed out that AMD was beginning to see increased boldness by its customers in light of its massive antitrust lawsuit against Intel, filed last June.
Our customers are willing to take more risks because of the lawsuit and some of the awareness and the light it has shed on some of Intel’s business practices, Kroll said.
Sunnyvale, California-based AMD alleges Intel has forced Dell and other OEMs into exclusive contracts through conditioned rebates or outright threats of intimidation.
Analyst Santiago pointed to AMD’s beefed up manufacturing capabilities as a major inflection point for the company in winning new business from Dell this year. AMD’s new Dresden, Germany-based chip-making facility, dubbed fab 36, is expected to significantly boost AMD’s ability to meet supply from Dell and others, he said.
As AMD ramps fab 36, we believe that major OEMs will push AMD-based platforms at an increasing rate, Santiago said.
Specifically, he expects AMD would ship 27 million desktop processors to Dell this year, along with roughly 1.4 million Opterons for Dell servers and 12 million mobile processors for Dell notebooks.
The discovery phase of AMD’s lawsuit against Intel has begun and several companies are supply evidence to AMD’s outside counsel, Kroll said. The process is expected to run throughout the year.
The European Union’s antitrust investigation into Intel may also potentially reveal its findings this year, he said.