AMD gains graphics expertise through ATI purchase

The deal, announced last month and valued at US$5.4 billion, is expected to close by the end of the year. By buying ATI, AMD aims to carve out a bigger piece of the consumer and mobility markets, said the chipmaker’s chairman and CEO Hector Ruiz.

“Our growth strategy is to capitalize on platform technologies in commercial and mobile computing and accelerate the adoption of our technologies in high-growth consumer electronic markets. This will start in 2007,” said Ruiz during a teleconference for media and analysts.

By 2008, AMD will deliver technologies that will combine the strengths of the two companies on a single chip, he said.

“We will reinvent what it means to provide processing altogether starting in 2008,” said ATI president and CEO Dave Orton.

The promise of integrated high-end graphics capabilities is the “fundamental reason” for the transaction, said Rick Bergman, senior vice-president and general manager of ATI’s PC group, in a separate interview with Computing Canada. “Intel’s had its own graphics and video technologies for a number of years. (ATI) gives AMD a leg up on Intel.”

Combination CPUs the future
The combination of CPU and advanced graphics on a single chipset is where the market is headed, said Voodoo PC chief technology officer and president Rahul Sood.

“It’s absolutely the future, especially for mobility applications. You’ll be able to have multi-core processors with graphics on one part of the core, physics on another and maybe two CPU cores, and all with a shared cache. It’s all possible.”

The Calgary-based gaming PC maker uses both Intel and AMD chips in its products, but Sood said the acquisition news certainly gives AMD a boost.

“I’m a fan of . . . everything that Intel is doing right now,” said Sood, referring to some of Intel’s newer chipsets, “but I’m also a fan of good technology. The long-term outlook for AMD, especially after this deal, is unbelievable.”

Intel already has a decade of experience with combined chipsets, said Illuminata analyst Gordon Haff, but mostly in the low-end of the graphics market. ATI gives AMD “a much, much broader range of the graphics market.”

The acquisition has been approved by the board members of both companies but needs shareholder approval. Some of the organizational elements have yet to be determined, said Bergman, but ATI will be maintained as a division of AMD, and much of its branding retained, including the Radeon name and ATI itself. No layoffs are expected, the companies said. Following the acquisition Orton will serve as the executive vice-president of the ATI business division and report directly to Ruiz.

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Jim Love, Chief Content Officer, IT World Canada

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