Advanced Micro Devices Inc will start providing microprocessors to Toshiba Corp, ending the Japanese electronics maker's exclusive ties with Intel Corp, Toshiba said on Tuesday.
Most other global PC makers, including Hewlett-Packard Co., Dell Inc. and Acer Inc. are already procuring microprocessors from AMD as well as from Intel, AMD's far larger rival with a market share of around 80 per cent.
Toshiba, the world's fourth-largest laptop PC maker, expects to put AMD processors in about 20 percent of the notebooks it sells in the United States and Europe, which account for about 60 percent of its overall PC operations.
The number of Toshiba laptop PCs loaded with AMD chips can be calculated at about 1.1 million units a year as Toshiba's overall notebook PC shipments came to 9.2 million units in calendar 2006, according to research firm IDC.
Toshiba plans to put AMD chips in moderate-priced standard models for individual and corporate clients, Toshiba spokeswoman Yuko Sugahara said.
"With PCs becoming commodity products, there seems to be a new way of thinking that competition should be introduced even in procurement of such core parts like processors as long as there are no major differences in product specifications," Macquarie Securities analyst Yoshihiro Shimada said.
"This could be a message that an era in which Intel took the lion's share of microprocessor profits as the king of PC chips is over."
Fujitsu Ltd. and NEC Corp., Toshiba's two major domestic rivals, procure microprocessors from both Intel and AMD.
The value of the Toshiba-AMD deal was not available, but prices of AMD's notebook-use microprocessors range from $86 to $263 apiece in a block of 1,000 units.
The Nikkei business daily reported earlier that prices of AMD-equipped PCs are expected to sell for up to 10,000 yen ($82) less than comparable models.
Toshiba will install AMD chips in some models to be released this summer, enabling it to reduce parts-procurement costs by at least 10 per cent, the paper said.
Shares of Toshiba closed up 1.2 per cent at 908 yen, outperforming the Tokyo stock market's electrical machinery index , which gained 0.44 per cent.