Dell has announced it is extending its relationship with AMD, announce earlier in the year with a range of new desktop computers.

Dell will launch Dimension desktop computers with AMD processors next month and will introduce a two-socket and multi-processor server using AMD Opteron processors by the end of the year the company has said.

The new comes after Dell shares plunged by more than 7.1% on Friday following a week of bad news that included a 51% decline in second-quarter profit an the recall of over 4 million notebook PC batteries.

Chief Executive Kevin Rollins blamed several factors, mainly overly aggressive pricing, a slowing marketplace and component prices that weren't lowering as expected.

Earlier in the week Dell announced it was recalling over 4 million notebook computers because of a risk of overheating batteries bursting into flames or exploding.

The affected notebooks are from the Latitude, Inspiron, Precision, and XPS series bought between April 2004 and July 2006.

“In rare cases, a short-circuit could cause the battery to overheat, causing a risk of smoke and/or fire”, said a Dell spokesperson.