IBM announced new servers that can give businesses more computing power than predecessors, and also save them costs on energy.

The new servers were unveiled in New York at a conference, and will use chips from Advanced Micro Devices (AMD). The processor company has steadily gained market share in the server arena from rival Intel Corp..

The five systems promise more computing power while offering more energy-efficiency and generating less heat than earlier machines. They also cost less than comparable high-performance systems, IBM said.

Today's announcement marks an exciting milestone in the IBM-AMD relationship, ever focused on delivering innovative solutions in response to customer requirements, said Hector Ruiz, AMD's CEO.

With a solid relationship on both the research and development and product innovation fronts, IBM and AMD are teaming to deliver unparalleled enterprise solutions that leverage open standards.

IBM did not disclose which Opteron processors it would be using in the five new servers, just noting that they are next-generation Opterons to be available in coming weeks. Experts believe AMD will release new processors in an effort to refresh its current line of CPU's, taking advantage of DDR2 and new packaging, but will not offer a fully new design until next year.

The company has been using Opteron processors since 2003, mainly to universities and research firms demanding high-processiing power.

IBM expects to start selling the new servers in the third quarter, when it will also announce pricing.

The announcement serves as a boost for AMD who has been facing increasing competition from Intel, who launched their own new server processor last June of this year, and just released a new desktop chip last Thursday.

Lehman Brothers analyst Tim Luke believes that today's deal may lead to more than IBM server share for AMD. The firm noted possible extensions of the chipmaker's dealings with Dell.

"Separately, our checks also suggest that Dell may also be weighing an expansion of its relationship with AMD beyond 4-way server and into the desktop arena in time for the holiday season with an announcement possible in the next several weeks,' Luke said.

The announcement is a boost for AMD as it hopes to maintain momentum against a raft of new chips from Intel. Dell said in May that it plans to use AMD's Opteron processors in high-end servers by the end of the year, ending a 22-year exclusive relationship with Intel.

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