AMD Buys ATI: What to Expect After the Acquisition
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It’s been described as the tech news of the year. Yet many couldn’t believe that AMD would actually purchase ATI right up until the two companies announced the deal on July 24. So who wins, who loses, and what can you expect to see coming off those fabrication lines? Keep reading for one reporter’s view.
Any gamer can tell you why the purchase seemed crazy at first glance. AMD chips are often paired with nVidia chipsets for high-end gaming machines, while Intel prefers to match its chips with ATI chipsets. Indeed, Intel has been planning to use ATI's Crossfire technology with its Conroe chips, a combination that would be enough to make many gamers drop their joysticks and reach for their wallets.
But as early as a week before news of AMD's purchase hit the press, Intel had reportedly dropped its use of ATI-based boards from its road map of desktop motherboards. The leading chip maker is still going to use Crossfire with its Core 2 Extreme processor, according to a new press release from Intel. But now that AMD has agreed to pay $5.4 billion to acquire ATI, mostly in cash (American, not Canadian) in a deal expected to close at the end of this year, you can expect to see some scrambling. Heaven knows how much the analysts are scrambling in an effort to keep up with the implications!
Let's start by ruling out one possible scenario that some media pundits and interested forum members keep suggesting: Intel is not going to purchase nVidia in response to this move. Yes, with the money the chip making giant has in the bank, it could afford the purchase much more easily than AMD could afford to purchase ATI (though, from another angle, AMD couldn't afford NOT to purchase ATI - but I digress). But Intel has very little reason to purchase nVidia, and some very good reasons not to.
Anyone who follows the chip market knows that Intel has been losing market share. Even Intel stronghold Dell may be turning to AMD shortly; granted, these rumors have circulated for years, but they seem to have increased in pitch lately. After several weak quarters, Intel began a restructuring campaign that hasn't yet run its course. To even think of purchasing nVidia in the midst of all this chaos would be a recipe for disaster.
This doesn't even take into consideration the antitrust implications. As it is, about 80 percent of new PCs boast Intel processors. With nVidia being one of the top two makers of graphics chips, any move by Intel to purchase the company is going to be looked at very closely by the relevant antitrust regulators. So, given that we're not going to see two monoliths, what WILL we see as a result of this purchase?
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