By Alice Hill
RealTechNews
The only business meaner and uglier than the semiconductor business is the world of graphics. Graphics companies fight each other like dogs, and have a tendency to go down in flames even after years of success. Anyone remember #9? For sheer survival alone, ATI should be given props. But now it looks like AMD is licking its chops and is considering purchasing the company in a potential merger that has Wall Street all revved up.
Advanced Micro Devices may be looking to buy graphics company ATI Technologies, a move that would benefit the overall graphics industry, according to RBC Capital Markets. “The synergies of this seem consistent with the recent announcements by AMD to significantly increase capacity over the next few-years,” wrote analyst Apjit Walia in a note to investors Wednesday. “We believe ATI is a rare-buy in the semiconductor space right now given the near-term tie-up dynamics.”
It has long been discussed that the graphics-companies are likely to be bought by one of the microprocessor companies, according to Walia. However, for AMD-rival Intel, a partnership with a graphics company may not be the best idea. “This tie-up might make sense for AMD at this juncture but we don’t think Intel should pursue tying-up with graphics companies and should instead look at the communications-space,” said the analyst. Source: Forbes
We Say: This says more about the PC business than it does about graphics, or mergers. ATI is a smart buy because it gives AMD more to offer as the demand for desktops continues to cool down. With consoles and handhelds requiring an array of graphical capabilities, owing the chips is not a bad place to be, but we can’t help but sigh over ATI’s possible acquisition. Those things never go well. Let’s hope Intel leaves nVidia alone.
And later the same analyst will recommend that the companies split so they can better leverage their different technologies. This is all a scam by investment banks to make money.
http://www.techdirt.com/articles/20060524/1252249.shtml
Hi Sean – so true. I can already see the articles on CPU companies and why they should stick to CPUs.
actually, i can see AMD buying ATi as a very good move… if AMD steps in and changes things, ATi may very well retake the graphics industry. as of right now, theyre rather lacking. CrossFire is expensive and a bit buggy. if AMD steps in and overhauls the entire system, it could push the power so much farther. with AMD’s technology in video cards, I believe that the tides of the video industry may turn.
Dan- I have to disagree with you for two key reasons.
1. AMD currently benefits from the fact that nVidia graphics solutions are most easliy used with AMD processors and nVidia chipsets. Strenghening Crossfire would hurt them far more than it would help them. This leads me to number 2.
2. AMD has its core competency in microporcessors. Sure they do other things to, but processors are their flagship product. Offering graphics cards will strip resources away from their microprocessor divisiona and allow intel to regain lost ground as AMD falls behind. They will also fail to gain ground on nVidia whose core focus is on their graphics cards.
These are reasons that AMD should stick to what they do best and not dabble in other markets so far removed from their core competency.
What about support for Nvidia based AMD chipsets? Do you think Nvidia will play nicely with AMD if the merger happens? I can’t see Nvidia cuttong off that partnership completly, but having a AMD/Nvidia based system might not be the best solution at that point.
My thoughts on this are that if AMD is looking to purchase ATI, then it would be to extinguish it rather than flourish it. AMD and Nvidia have been hand in hand for years, with the combination beating out Intel in the PC wars. Intel based motherboards with the Nvidia chipset are really buggy and unstable, leaving most of the Intel users sticking to ATI. If AMD buys ATI, then it is pretty much a power move to further spike the ball into Intel’s court. It also happens to benefit Nvidia because if the technologies suddenly slow down for ATI, then Nvidia wins again. I wonder who really is pulling the strings on this one…
My thoughts about this is that Linux users will also lose because, quite honestly, ATI still haven’t done much in the Linux arena in providing drivers. Even if NVIDIA is providing the “evil” binary blob, it’s still a step in the right direction. Well, that is unless AMD decides to open up ATI specs if they decide to buy ATI.