AMD Buys ATI

[Wayde]

AMD Buys ATI

Advanced Micro Devices, AMD the world's second largest microprocessor developer and bane of Intel announced that it agreed to buy ATI for $5.4 Billion dollars. ATI Technology is a Canadian graphics processor (GPU) manufacturer who makes many of the world's top rated video cards for PCs. ATI was also awarded the contract from Microsoft to develop the GPU that went into the Xbox360.

AMD has been stealing market share away from Intel for years as the #2 chip maker for PCs. By following Intel and quietly developing its own innovative approach it has recently turned the tables on Intel in the chip making business. Intel behaves lately like a company that's intimidated by its competitor. Intel seems to have stopped innovating and started following AMD. Case in point is the new multi-media processors being developed by Intel and AMD. AMD produced its Live technology and soon after Intel announces its own imitation right down to the name, Viiv.

AMD's processors today can bring more power to your PC with chips that operate with fewer cycles per second than the competing Intel chip. AMD is able to simply do more with less. Intel is still the top chip manufacturer but AMD is now making a power play that could possibly change the shape the business.

By buying ATI, AMD is committing itself to integrating graphics technologies into future CPUs. This could appear in future AMD CPUs in much the same way AMD already integrates memory controller technology into its CPUs.

How will Intel respond? Some already speculate it could go after ATI's competitor Nvidia the top GPU (graphics processor unit) manufacturer. But to what end? Seeking integration of other technologies into its CPUs would be a departure for Intel. Creating outside architectures into its processors has long been AMD's game. But lately it's been proving so successful that Intel will have to reconsider its status quo.

Speculation has already emerged that AMD may not be finished with high profile acquisitions. Some even say that AMD may go ahead and acquire ATI's primary competitor in the GPU arena Nvidia for themselves. This would be a highly controversial move but Jen Hsun Huaang, co-founder of Nvidia corporation was a designer at AMD. Nvidia and AMD have enjoyed a partnership with Nvidia that resulted in the nForce chipsets which have been a major source of revenue for nVidia and critical success for both companies.

What will the implications be if Nvidia and ATI are united under the AMD banner? A flurry of expert speculation has already begun.

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