The computing giant is to give chipmaker AMD a boost with a new line of business desktops

Hewlett-Packard on Monday will launch a new line of business desktops containing processors from AMD, according to sources.

The Compaq D325 will be targeted at small and medium-sized business as well as at government customers. The computers will contain the Athlon XP 3000+ chip or other, slower versions of the processor.

Among large PC makers, HP has emerged as one of AMD's strongest allies. Although Gateway and IBM have dropped AMD chips from their desktop lineups in recent years, HP has continued to use Athlon processors in consumer notebooks and desktops.

Last August, the company released the Compaq D315, a desktop aimed at small and medium-sized businesses, a move that marked the first time a major PC maker had inserted an AMD chip into a business computer. AMD has been able to sell its chips into the business market, but mostly through smaller manufacturers or in overseas markets.

AMD chips often cost less than their counterparts from Intel. Since the beginning of the year, HP has been using discounts to take share, or at least maintain its ground, in the PC market against archrival Dell Computer.

HP also remains one of the more visible customers for the Crusoe product from chipmaker Transmeta. It uses the Crusoe TM 5800 in its Tablet PC.

Earlier this month, HP released new business desktops incorporating the 865, or Springdale, chipset from Intel. The PC maker is also scheduled to release its first notebook using Intel's Centrino bundle of chips in the second quarter, company executives have said.

Copyright © 1995-2008 CNET Networks, Inc. All rights reserved
ZDNET is a registered service mark of CNET Networks, Inc. ZDNET Logo is a service mark of CNET Networks, Inc.