AMD hits back at Intel with IBM server deal

Stan Beer
Wednesday, 02 August 2006 05:50

Your IT - Home IT

Shrugging off a raging price war in the desktop processor space with Intel, chip maker AMD has struck back to jointly announce a deal with IBM for the supply of Opteron chips.

The deal will see IBM use high-end Opteron processors for its new blade and rack-mount server range.

AMD, which claims 20% market share in x86 processors, is currently locked in a struggle with its larger rival Intel in the desktop space, where Intel has released a new range dual-core processors that beat AMD's Athlon on peformance and power consumption. This has forced AMD to slash desktop processor prices.

However, AMD appears to be going from strength to strength in the server space, increasing its market share to nearly 26% in the second quarter.

IBM has been using Opteron chips on a limited basis in its servers since 2003 and the new announcement greatly expands AMD's penetration into the company with promises from IBM of more expansion to come. Both Sun and Hewlett-Packard, which is vying with IBM for server leadership, are heavy users of Opteron chips in their respective server ranges.