IBM servers use chips by AMD

IBM Corp. unveiled a line of business computers using Advanced Micro Devices Inc.'s Opteron microprocessor on Tuesday, giving another boost to the chipmaker in its rivalry with Intel Corp.

Tom Bradicich , chief technology officer of IBM's systems and technology group, said the Armonk, N.Y., company has embarked on a major expansion of its relationship with AMD by introducing Opteron-based servers.

The roll-out of five computer systems and blade computers follows the announcement in May by Dell Inc. that it will use Opteron chips in some of its products, ending its exclusive relationship with Intel.

The IBM announcement highlights AMD's gains in the semiconductor market, where it has slowly chipped away at Intel's dominant position.

Analyst Crawford Del Prete of International Data Corp. said the IBM announcement also underscores the changing attitude of the business world toward Sunnyvale's AMD.

In the past, he said, AMD chips were seen as the cheaper and less sophisticated alternative to Intel products. But that view has changed with the introduction of Opteron, which he said has proven to be highly competitive.

"I think they have carved out a niche," he said.

In a statement, AMD Chief Executive Officer Hector Ruiz said the announcement "marks a milestone in the IBM-AMD relationship."

Bradicich said the IBM business computer products were introduced in response to growing customer demand for more powerful computers that can flexibly expand or scale down capacity without gobbling enormous amounts of energy.

Many business customers have become frustrated with overheating at data centers, and major tech companies, led by IBM, Hewlett-Packard Co. and Sun Microsystems Inc., have been focusing on the development of cooling technologies to solve the problem.

Bradicich stressed that Santa Clara's Intel remains a major IBM partner. "We're not replacing or reducing the Intel portfolio," he said.

Intel remains the dominant chip vendor in the world, but AMD has slowly gained market share during the past two years.