Ahead of the Curve: AMD's ATI purchase will yield long-term payout

AMD's planned US$5.4 billion merger with Canada-based graphics chip vendor ATI Technologies prompted some indignant sniffing about "desperation" among the technology sector's chattering class. That kind of second-guessing is natural, especially on the heels of AMD's decision to cut prices in half on some of its PC processors, which prompted similar action from Intel. But no matter what you've read, AMD's CPU price cuts and its acquisition of ATI are not signs that the company is on a downward slide.

First, the fuse on AMD's price cuts was lit well before they were made public. AMD enjoyed lucrative margins on Turion 64 and Athlon 64 FX notebook and performance desktop CPUs, right up until the invitations went out for the July 27 launch of Intel's Core 2 Duo 64-bit client CPU, code-named Conroe. The cannily timed price cuts of as much as 57 percent on AMD's 64-bit desktop and notebook CPUs allowed AMD to crash Intel's Conroe party last Thursday.

The purchase of ATI may go down as one of AMD's most brilliant strokes yet. ATI is best known for GPUs (graphics processing units) used on 3-D and full-motion image-rendering PC video cards. ATI roughly splits that market with rival nVidia. But ATI is the stronger of the two vendors in mobile and motherboard-integrated GPUs, both big growth areas. ATI gives AMD an answer to the integrated graphics circuitry that Intel baked into its Core Duo and Core 2 Duo CPU support chip sets.

But ATI's value extends beyond the graphics arena. ATI also makes chip sets for Intel- and AMD-based PCs. Since the debut of AMD64, AMD has left the chip-set business to third parties. Whereas Intel makes its own chip sets and controls the pricing and supply, AMD has been at the mercy of third-party chip-set pricing and delays, as well as performance and quality issues. The ATI and AMD deal doesn't go before shareholders until later this year. Until then, ATI and AMD will be happily and profitably living in sin.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Tom Yager

InfoWorld
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?