AMD-Dell deal said to be close

Rumors that Advanced Micro Devices is about to become a key supplier of

microprocessors and flash memory chips for Dell Computer sent AMD's shares

soaring to a record $71 on Wall Street. Dell officials, while conceding that the

two companies are having discussions, refused to acknowledge a deal is imminent.

AMD's ability to penetrate Intel strongholds such as Dell, Gateway and Compaq

is due to its ability to deliver leading-edge chips, some of which outperform

Intel's top processors, combined with Intel's struggle to meet demand for

high-end Pentium III chips. Dell Vice Chairman Kevin Rollins said reports that a

deal is imminent are false. "That is not true. We're still continuing to

look at the products. We continue to talk. There are still problems with the

availability of the products. There's no change in direction," Rollins

said. "We meet with AMD every month. We've been pretty consistent over five

years telling analysts the same thing. This comes up at every meeting, but there

is no news, no announcement."

A deal with Dell would be a major coup for AMD. Dell is the world's second

largest personal computer maker and is Intel's top customer. But Dell is the

only major computer maker that does not use AMD processors in any of its

machines. Others, such as IBM, Compaq and HP are using AMD processors in a

variety of systems.