Sun-Intel deal puts heat on AMD, report says

Sun Microsystems reportedly is about to ink a contract with Intel Corp. on the supply of server processors, according to reports. The deal could affect Intel competitor Advanced Micro Devices Inc. (AMD) and its processor production in Dresden, Germany.

According to a Wall Street Journal (WSJ) report, Sun Microsystems will announce an agreement with Intel to use the company's microprocessors in some of its servers. The plan includes an endorsement by Intel of Sun's Solaris OS. Neither Sun's nor Intel's European subsidiaries commented on the report.

Such a move could affect AMD, who sells its Opteron dual-core processors to Sun. Presently, Sun Microsystems exclusively uses processors from AMD in its x86-compatible product line. While AMD also plans to build quad-core processors, they are not in production yet. Intel, however, already manufactures quad-core processors in volume production.

The WSJ report quotes an expert saying that Intel could secure 25-to-50 percent of the shipments that presently come from AMD, representing a value of somewhere between $25- to $50 million.

For AMD, the move would come at a very critical point in time. Presently, the chip manufacturer is in the process of expanding its processor production line in Dresden, with investments of several billion dollars, targeting a capacity of 45,000 wafer starts per month.

- Christoph Hammerschmidt
EE Times