Film studio DreamWorks, which counts films including Shrek and Kung Fu Panda among its successes, is teaming up with Intel as it as it focuses its efforts on the creation of 3D animated films.

The animators, which until now had been in collaboration with AMD, announced Intel will be supplying the studio with multi-core chips. Last year, DreamWorks Animation announced that it will be going entirely 3D by 2009, beginning with the film Monsters vs. Aliens, which is scheduled for release next March.

"Our objective is to significantly heighten the movie-going experience," said Jeffrey Katzenberg, CEO of DreamWorks Animation.

"Technology plays a significant role in enabling our artists to tell great stories. By utilising Intel's industry-leading computing products, we will create a new and innovative way for moviegoers to experience our films in 3D."

However, good news for Intel is bad news for AMD.

In April 2005, AMD was the one announcing a partnership with DreamWorks - a three-year strategic alliance aimed at advancing computer-generated filmmaking. Now, Intel is the one touting an alliance.

"This is not good news for AMD," said Charles King, an analyst at Pund-IT.

"Anytime Intel takes business away from AMD, especially in high performance computing, it's a big win for them. In the short-term, it's probably worth more in prestige than money, but being the processor associated with next-generation 3D animation could be very lucrative over the long term."

King noted that being associated with the Star Wars movies was a major boon for Silicon Graphics.

In addition to supplying DreamWorks with multi-core chips, Intel said its engineers also will work on building parallel applications that can take advantage of the multi cores.