Toshiba to Use AMD Chips

For AMD, the pact with Toshiba is the company's first major OEM win since Dell announced in 2006 that it would start to use AMD processors.

Advanced Micro Devices chalked up a victory against rival Intel when Toshiba announced it will start using dual-core AMD Turion 64 X2 processors and the M690 chip set in some of its Satellite notebooks.

For years, Toshiba has used only Intel chips in its notebooks, but company executives at a press conference in Tokyo May 29 said Toshiba will begin to offer AMD chips as an alternative in notebooks that are geared toward consumers as well as small and midsize business customers.

For AMD, the pact with Toshiba is the companys first major OEM win since Dell announced in 2006 that it would start to use AMD processors. Now, Dell has several desktops, laptops and servers powered by AMD chips.

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For Toshiba, which Gartner ranks fifth among worldwide PC vendors, the announcement means the company can offer new models in time for back-to-school sales in the United States this fall to compete against much larger OEMs such as Hewlett-Packard, Dell and Lenovo Group.

Dean McCarron, an analyst with Mercury Research, said Toshiba and AMD are each trying to take advantage of the red-hot mobile market, where companies such as HP and Acer have gained much traction in the past few months.

More important, the mobile market is the one area in which AMD continues to gain market share in its race with Intel. In addition to the improvements AMD made when it introduced its Turion microprocessor architecture, the company has scored some impressive partnerships in the notebook space with such vendors as HP and Acer, and now Dell and Toshiba.

"This is much more reflective of AMD expanding within the OEM portion of the market," McCarron said. "AMDs mobile business has done quite well, and its overall sales have increased even though it took a major downturn in the first quarter."

Still, AMD has much work to do to recover from the last few quarters. A Mercury report released in April showed that AMD has lost some of its market share in the overall x86 market, and Intel recently announced plans to expand its reach into the notebook and mobile space during the next few years.

AMD is planning to release a new mobile processor and platform in 2008.

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