Intel to replace AMD as DreamWorks supplier

Intel Corp., the world’s biggest computer chip maker, has supplanted Advanced Micro Devices Inc. as the supplier of microprocessing equipment to movie studio DreamWorks Animation SKG Inc.

Intel will install servers -- computers that run networks -- based on its technology at DreamWorks Animation, the companies said Tuesday.

In 2005, AMD signed a three-year deal to provide processors to the Glendale studio, producer of such films as “Kung Fu Panda” and the “Shrek” series.

Intel and AMD are working to improve the quality of graphics processing in computers by integrating the capability, normally provided by separate semiconductors, into their microprocessors.

Starting next year, DreamWorks Animation intends to make all its films in “stereoscopic 3-D,” which requires more computing power.

“We are now converting exclusively to Intel,” DreamWorks Animation Chief Executive Jeffrey Katzenberg said.

“It’s a much more ambitious program, and we need the capabilities of Intel to achieve it.”

Using Intel’s chips will speed up production, changing the way the studio’s animation artists work, he said.

Shares of DreamWorks Animation climbed 89 cents to $29.65. AMD, rose 15 cents to $5.53. Intel gained 21 cents to $20.92.

Santa Clara, Calif.-based Intel’s share of the server market increased to 87.5% in the first quarter this year, from 84.8% a year earlier, according to Mercury Research.

Sunnyvale, Calif.-based AMD’s market share fell to 12.5% from 15.2%.

“We look at these things as cyclical and that the opportunity will present itself again in the future,” AMD spokesman John Taylor said.