Dell Inc. on Monday dismissed as "rumor" a report that it has notified Taiwanese PC contract manufacturers to ready production lines to produce Dell PC systems using microprocessors made by Advanced Micro Devices Inc.

A report in the Chinese-language Economic Daily News of Taipei said Dell has already notified major Taiwanese contract manufacturers such as Hon Hai Precision Industry Co. Ltd. and Quanta Computer Inc. to prepare to begin production of desktop and notebook PCs based on AMD microprocessors. Taiwanese companies normally gain a first glimpse of such product changes because they build a lot of the systems sold by Dell and other PC companies.

Rumors that Dell, the world's largest PC seller, might start using AMD microprocessors have been around for years, but the company has never taken the plunge because of a special relationship with Intel Corp., its sole microprocessor supplier.

Industry watchers believe Dell receives discounts on Intel chips as a result of its continuing loyalty to the world's largest chip maker. Early this year, Dell chief executive officer Kevin Rollins put speculation that it might use AMD chips in some systems to rest, saying it had again opted to maintain its Intel-only stand.

On Monday, the company dismissed the report as speculation.

"We do not comment on rumors and speculation," said Judy Low, Asia-Pacific spokeswoman for Dell Inc. in Singapore.

Sources at four Taiwanese contract manufacturers and parts makers either declined to comment or said they did not know of any plans by Dell to use AMD microprocessors in their PCs.

IDG News Service

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