Sun Microsystems Inc. plans to make server computers with a new chip from Advanced Micro Devices Inc.
Sun will introduce a line of machines for running corporate networks using AMD's 64-bit Opteron chips in the first half of 2004, Sun spokeswoman Sabrina Guttman said. Sun's Solaris and Java software will run on Opteron-powered systems, she said.
Sun would not say how many chips it expected to buy or how much it would pay for them.
Sun, based in Santa Clara, Calif., is introducing products to compete against cheaper servers from Hewlett-Packard Co., Dell Inc. and IBM Corp.
The AMD relationship will help Sun sell more servers to small and medium-sized businesses, said Brad Day, an analyst for Giga Information Group.
"If this relationship takes, it will allow Sun to reenter a segment of the market they left and Hewlett-Packard and IBM have taken over," Day said.
AMD will get another top manufacturer backing the Opteron chip, which is being used by IBM, Day said.
Sunnyvale, Calif.-based AMD has been trying to catch up with Intel Corp. by marketing 64-bit microprocessors that can crunch complex calculations faster than current-generation 32-bit processors. AMD has struggled to gain ground against Intel for years despite lower prices and, according to some experts, equally powerful chips.
Shares of Sun fell 2 cents to $4.08 on Nasdaq. AMD fell 50 cents to $17.36 on the New York Stock Exchange.