Exclusive: Dell close to adopting AMD chips

Dell president and CEO Kevin Rollins indicated that the company is actively considering including AMD processors in its server roster in the foreseeable future.

As of now, the PC and server maker remains as the lone holdout among its competition in not using AMD chips.

"My guess is we're going to want to add that [AMD] product line in the future," Rollins said in an interview on Wednesday with InfoWorld editors.

Rollins pointed to AMD's technology lead on Intel in the 64-bit category as the primary reason for the shift in Dell's Intel-only strategy.

"They've been getting better and better. The technology is better. In some areas they're now in the lead on Intel. That is what is interesting us more than anything," he said.

With the release of its 64-bit Opteron chip for servers and 64-bit Athlon64 processor for desktops in 2003, AMD has won over every major computer manufacturer except Dell. Even Microsoft picked up AMD's 64-bit banner, designing its 64-bit version of Windows on AMD's architecture, not its traditional ally, Intel.

If in fact Dell climbs on board, AMD will have realized a company goal that many never thought possible. Since coming under the direction of Hector Ruiz, CEO for the past two years, AMD has enjoyed a technological lead on its biggest rival and four straight profitable quarters. That financial viability had a big influence on Dell's consideration of the company, according to Rollins. "They are more viable of a company than they once were," he said.

Dell is not expecting, however, to put the AMD chips into desktop PCs, Rollins said.

"If we basically sucked up all of AMD's [manufacturing] capacity it would not be enough. They don't have enough capacity for us to use them on the desktop. For us, fundamentally, AMD is much more interesting in the server, workstation or gaming arenas," Rollins explained.

Dell has flirted with AMD in the past, but most analysts believe Dell did so only to win more concessions from Intel.

"Dell has come close before, but we've been hearing that they've become more serious lately," said Dean McCarron, principal analyst at Mercury Research.

Rollins emphasized that Dell has not been missing opportunities by not having an AMD system.

"We have not been losing a ton of business because we haven't had AMD," he said. "At the end of the day we have to be profitable and grow. That's the main indicator of what we’re going to do."

-- Ed Scannell and Tom Sullivan contributed to this report.