AMD Buys ATI: What to Expect After the Acquisition - Bigger Badder AMD
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To start with, we will see a much stronger, more diversified AMD, able to compete with Intel in far more areas. Intel's greatest strength may be in microprocessors, but the company does produce chipsets and graphic chips. AMD, on the other hand, mainly produces microprocessors, and lets other companies create the chipsets and graphics goodies that make the best use of a PC's "brain."
Guess what? All that just changed. With ATI bringing its chipsets and graphics chips to the table, AMD can now turn out a product that's more tightly integrated, with the pieces even better "tuned" to work together. That should be good news for gamers. Also, AMD chips have historically delivered a better price/performance ratio than Intel chips; without getting into the nearly-religious arguments concerning ATI vs. nVidia, I'd like to point out that the same appears to be true for ATI (you don't have to be "the best" to deliver the best price/performance ratio). Indeed, with the new Crossfire, ATI might at last have a product that can keep up with nVidia. And that should be very good news for anyone on a tight budget who wants a PC that can deliver a quality gaming experience.
As if that's not enough, ATI also makes semiconductors for consumer products, such as high definition TVs and cell phones. PC sales have been slumping lately, and cell phone sales have been bursting through the roof (check out this report from Red Herring about the likelihood of reaching the billion-unit mark this year). In that context, and with Intel still showing some reluctance to get into telecommunications chips, AMD's purchase of ATI looks downright forward-thinking, and I don't mean for just next quarter or next year.
So what will the combined company look like? Imagine a firm with $7.3 billion in sales over the previous year, with a workforce of 15,000 and sales, design and manufacturing centers worldwide. Put its headquarters in Sunnyvale, California, with major business centers in Silicon Valley; Austin, Texas; and Markham, Ontario. Could that possibly be a threat to a company like Intel, who recorded more than $38 billion in sales in 2005 and boasts close to 100,000 employees? That depends on whether you believe a smaller, more nimble firm can outcompete a larger one in love with older ideas.
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