AMD buys ATI.

Published on July 24th, 2006

Updated from earlier post — when we were waiting for confirmation.

Best Mates, AMD and ATI held a conference call today in which the companies’ biggest cheeses sought to justify their new cohabitation.

The ‘excited’ executives were led by AMD CEO Hector Ruiz who lauded the deal as re-shaping the future of the industry. “We’re excited about what we can do together in a market dominated for years by one company,” in the first of many digs at arch-competitor Intel.

Ruiz confessed that AMD had been mulling its best options for a partnership over the past two to three years and it is ATI’s expertise in the mobility space as well as its chipset business that makes the firm such a good fit with AMD.

The ATI team will play a key role in the joint future of the company he said, adding he was confident that the companies and their respective cultures would integrate well together, their products having occupied “adjacent real-estate on motherboards” for so long.

Dave Orton confessed to being as excited as anyone. Be said the combined company would be able to look beyond the CPU, GPU and chipset landscapes and increase its penetration into enterprise, mobile computing and consumer electronics sectors.

As far as executive statements go — in this context — it all sounds pretty reasonable. We can look forward to a week or two of gossip passing for “insider info” — and settle back to see what products result from the acquisition.

You don’t exactly rush out and do deals like this without a plan. I hope.

13 users responded in " AMD buys ATI. "

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# 1 deitarion/SSokolow said, on July 24th, 2006 at 2:26 am

If they do, I hope they fix ATi’s policy regarding Linux support. As it is, I consider ATi to be an embarrasment to Canada.

Of course, I’ll still go NVidia for TwinView. (Hardware acceleration for dual-monitor use)

# 2 Jason said, on July 24th, 2006 at 4:09 am

I hope they increase the quality of those damn cards. The last ATI card I bought was the 9700pro and it exploded on me. I’ve been nVidia for 3 years strong now.

An AMD+nVidia merge would have knocked my socks off.

# 3 forrest said, on July 24th, 2006 at 5:02 am

I can see this as the beginning signs of locking ATI graphics and chipsets to solely AMD and locking out nVidia to AMD…or having “additional functionality” with ONLY the ATI/AMD combination.

# 4 Jared said, on July 24th, 2006 at 5:10 am

It’s gone through. On AMD’s news page they have stated that they are going to merge. I really hope it doesn’t mean an anti-NVidia AMD, because they’ll lose a major base, gamers. Unless they can amp up ATI’s card qualities, or lower their prices (ATI is the top in Europe because price is lower than nVidia’s). One of the two has to happen if AMD does decide to make their support limited to ATI, or they’ll go under fast.

# 5 Jetfire said, on July 24th, 2006 at 5:41 am

This makes no sence to me. Nvidia makes the best Chipsets for AMD MB. Is AMD shooting themself in the foot? Intel just released a better processor. So now they become competior to their (IMO) strongest partners. Will this push Nvidia to make the Intel+Nvidia the prefered gaming platform.

Don’t get me wrong ATI makes great video cards. The battle between them and Nvidia have been a plus for us gamers. I just don’t see the plus side for AMD or users.

# 6 Thomas said, on July 24th, 2006 at 5:57 am

#3
I’m not so sure. NVidia has always been a big supporter of AMD. AMD+NVidia has always been a strong combination. So much so, that I’m actually surprised that AMD is not buying NVidia instead of ATI.

BTW, ATI’s problem has never been the quality of its hardware. Rather, the problem with ATI is the quality of its drivers. That said, over the last couple of years NVidia has worked hard to bring itself down to the driver quality of ATI.

# 7 Jared said, on July 24th, 2006 at 6:12 am

That’s right, nVidia has never been amazingly superior to ATI, but thier support, and price in the US, has always set them ahead of their competion. Maybe with AMD ATI will be better supported, and maybe even a price drop.

As to AMD buying nVidia, can’t afford it is the simple answer. With ATI’s gradual drop in the American consumer market, which is probably the most influential market in Gaming hardware (CPU’s, Video cards…) . AMD may be up and coming, but there’s no way they could have affored to buy out nVidia, not under intel’s watch.

# 8 John C Dvorak said, on July 24th, 2006 at 8:34 am

I openly predicted that this deal could not be pulled off. I’m still not convinced until the papers are all signed.

# 9 Mr. H. Fusion said, on July 24th, 2006 at 8:41 am

Put me on the skeptical bandwagon. AMD would have been much better off aligning itself with nVidia. Maybe buying them outright would be too expensive, but a merger or even partial ownership could have worked.

ATI makes good video cards. nVidia makes great video cards and chipsets.

# 10 OhForTheLoveOf said, on July 24th, 2006 at 9:55 am

ATI and nVidia have both taken turns in the captain’s chair… I tend to chose a side and stick with it. AMD is hands down the finest proc shop known to man. nVidia is the finest graphics house since 3dfx.

I doubt that AMD is alinging themselves with ATI. I doubt that AMD went shopping for a graphics card company. Rather, if we had a look at ATIs books, this is likely a case of AMD recognizing an opportunity when the see one, and I’m willing to bet a number of regular employees at ATI might be breathing a sigh of relief right about now… the relief of still having a job (for a while).

# 11 Gary Marks said, on July 24th, 2006 at 2:21 pm

The worst thing about this acquisition is the potential for distraction at a time when AMD is already confronted with such a tremendous competitive challenge from Intel. Most acquisitions are accompanied by more than a few digestion pains, but AMD is already going to be hurting plenty until they can match the technological leap that Core2 Duo chips represent. Fortunately for AMD, Intel isn’t ramping their manufacturing of the new chips as fast as the market would like, and there isn’t a great selection of motherboards for Core2 Duo, either, but that will change.

On the same day that AMD announces a $2.5B load commitment from Morgan Stanley to buy ATI, they take a chain saw and slash their chip prices just to stay somewhat competitive with Intel, and you know they don’t need any unnecessary distractions. And they can’t afford a misstep. I certainly wish them luck, though, because they’re a scrappy little company!

# 12 Mr. H. Fusion said, on July 24th, 2006 at 5:26 pm

#11, Gary, very good comment. The one constant in AMD’s favor is that so many of their customers are intensly loyal. There would have to be an extreme advantage to put an Intel above an AMD in our choices.

# 13 Fred said, on July 25th, 2006 at 6:54 am

Here is a great article on the merger, http://enthusiast.hardocp.com/article.html?art=MTEyMiwxLCxoZW50aHVzaWFzdA==

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