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Forget a four-way flirtation. Dell is set to go the whole hog with AMD, according to a new report from Merrill Lynch.

The financial analyst firm has Dell shipping PCs and notebooks with AMD Inside during the fourth quarter. Such a move would build on Dell's decision in May to add AMD's Opteron chip as an option for high-end, four-socket servers. In a larger context, Dell's use of AMD chips in consumer and business computers would be a huge blow against Intel.

"Our colleague Tony Tseng indicates the desktop products are likely to come from Taiwan-based ODM Mitac," Merrill Lynch wrote. "Quanta is the most likely partner for notebooks, although confirmation there has been more difficult."

The Dell/AMD speculation game has been a favorite for analysts and reporters over the years. The sport, however, took on a more serious tone when Dell picked Opteron for servers. Ever since then, analysts have been quick to suggest that Dell will push AMD's chips throughout its product line.

Merrill thinks that abandoning the Intel-only computer stance could be a good move for Dell.

"We believe a diversified supplier base is the right long-term strategic stance for Dell though we don't see AMD as dramatically impacting near-term financials at Dell, particularly if the competitiveness of Intel/AMD platforms converges over time," the firm wrote.

AMD could use some news of this caliber. After enjoying a two-year wild ride, AMD now faces a stronger Intel. The company earlier this month lowered its second quarter revenue forecast, reflecting the heightened competitive pressures.

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