AMD and Their Struggles - Merger with ATI
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In the summer of 2006, AMD and ATI merged to create a dominating force in not just CPUs, but also graphics chips. It cost AMD almost $5.5 billion to buy ATI, but they thought it was the best opportunity for them at the time. Intel has always created chipsets for their CPUs and also are the number one producer of graphics chips. AMD wanted to push what they could bring to the table.
With ATI, AMD could use existing ATI products and designs to call their own. Though ATI was just getting into the chipset market, they were still ahead of anything AMD was designing. Until the merger, the biggest chipsets for AMD processors were built by nVidia, ATI's biggest competitor. AMD needs to use ATI’s chipsets to try to prevent nVidia and other companies from making their own chipsets. A cheap, but full-featured chipset would put a hammer in the market. They need to get Dell and HP type manufacturers to use AMD chipsets and phase out nVidia.
ATI graphics cards are among the best-known cards on the market, currently ranked number three in terms of market share at roughly 20%. The merger was a quick way for AMD to get into the graphics market, but it hasn’t shown the potential it can with the resources of AMD and the name and existing technology of ATI.
Since the acquisition, ATI hasn’t done very well at all. They dropped from the second to third leading graphics provider, losing roughly 18% market share. And their current product line-up is lackluster. nVidia had Direct X 10 cards out almost a year before ATI’s answer. Even when ATI introduced their cards, they were still behind nVidia’s competitor in benchmarks. Only recently with the HD 3000 series cards has ATI had some interesting cards.
Remember, a majority of graphic cards are low end and usually found in HP, Dell or Gateway machines. Very rarely do you see high end GPUs in these types of computers. I would say that a vast majority of these are integrated GPUs. As far as that goes, I would have to put AMD/ATI at the top of this with their new 690 chipset. I recently reviewed a motherboard with it, and I was very impressed. If more companies pick up this chipset, AMD's market share could jump.
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