Dell Shakes Up Tech Sector With AMD Switch

Dell's announcement that it will use microprocessors from Advanced Micro Devices for the first time highlights the struggles of the leading personal computer maker, and could shake up the sector. Dell shares rose May 19 after the hardware giant issued a steady forecast, unveiled a cost-cutting plan and said it would use AMD chips in its high-end servers.

While Dell remains the world's biggest PC maker, it has been losing market share to Hewlett-Packard and others. Still, analysts and investors were encouraged by Dell's plan to begin using chips from AMD in some of its high-end servers, a major switch for a company that had used microprocessors from Intel Corp. exclusively.

The move toward AMD chips "will enable Dell to compete more aggressively in the server market," said Momin Khan, an analyst with Technology Business Research.

The decision was enough to send AMD shares more than 8% higher. Intel shares fell 2.6% on the news.

Copyright Agence France-Presse, 2006

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