AMD, Compaq, HP, others form unholy buying alliance

Twelve major PC industry players have formed a separate company in a bid to ease PC component procurement and speed up their supply chains.

Compaq, HP, Gateway, Hitachi, Infineon, NEC, Quantum, SCI, Western Digital, Samsung, Quantum and AMD said yesterday they would invest money in an "open Internet exchange", designed to reduce inventory and speed delivery. The exchange, details of which can be found at this site, will start its operations within 90 days, executives at the different firms said. The B2B exchange will be available to everyone involved in the supply chain, including contract manufacturers and other suppliers and distributors. Participants will be able to trade and plan using an e-commerce front end.

The exchange was welcomed by PC luminaries including HP's Carly Fiorina and Compaq's Mike Capellas, as well as Gateway. But it is significant that Intel and its close partner Dell are not joining the party. From one point of view, the exchange can be seen as a response to Dell's growing PC market share, with former bitter enemies HP and Compaq sinking their differences in the hope they can offer lower prices and hang onto their market share.

Intel already has a complex business-to-business e-commerce relationship with its partners, and the fact that some of its major customers have linked with upstart chip firm AMD will cause some eyebrows to be raised in Santa Clara. The 12 partners will plunge $100 million into the scheme for its startup, and each has equal ownership in the exchange. ®