Toshiba to use AMD chip in laptop PCs

Toshiba Corp's laptop computers are displayed at an electronics store in Tokyo in this file photo dated September 30, 2006. Toshiba said it would buy microprocessors from Advanced Micro Devices Inc., ending its exclusive ties with Intel Corp. for the supply of the brains that run computers, and sending its shares higher.

TOKYO (Reuters) - Toshiba Corp. (6502.T) said it would buy microprocessors from Advanced Micro Devices Inc. (AMD.N), ending its exclusive ties with Intel Corp. (INTC.O) for the supply of the brains that run computers, and sending its shares higher.

Toshiba, the world's fourth-largest laptop PC maker, said on Tuesday it expects to put AMD processors in about 20 percent of the notebooks it sells in the United States and Europe.

The move follows an announcement last year by Dell Inc. (DELL.O), the world's second-largest PC maker that had been procuring microprocessors only from Intel for more than two decades, that it would begin using chips from AMD.

Intel is AMD's far larger rival with a market share of around 80 percent.

"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."

Toshiba plans to put AMD chips in moderate-priced standard models for individual and corporate clients, Toshiba spokeswoman Yuko Sugahara said.

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 percent, the paper said.

Shares of Toshiba were up 1.0 percent at 906 yen in early afternoon trade, outperforming the Tokyo stock market's electrical machinery index .IELEC.T, which gained 0.37 percent.