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Rumors Swirl Around Potential Dell-AMD Deal

Solution providers lamented a possible loss of margin that could come if Dell begins building systems based on chips from Advanced Micro Devices.

Paul Giobbi, president of Zumasys, Lake Forest, Calif., which recently began selling branded servers with AMD CPUs without the “typical pricing pressures,” wasn’t relishing the idea of going up against Dell.

“They could commoditize the hell out of them and make them a lot less fun to sell,” Giobbi said.

Last week, an industry analyst at Piper Jaffray suggested that Dell would be using AMD CPUs as early as the second half of 2006. The prediction is based on conversations with PC component suppliers, press reports of Asian manufacturers working on AMD designs for Dell and AMD’s recent confirmation of chip shortages.

Just a week prior, Dell Chairman Michael Dell gave perhaps the strongest indication yet that he would consider using Sunnyvale, Calif.-based AMD’s processors. Earlier this month at the International Consumer Electronics Show in Las Vegas, Dell said it was “a distinct possibility” that his company would consider using AMD processors. In the past, Dell has rebuffed the notion of using non-Intel processors.

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