AMD completes ATI merger, plans CPU, GPU fusion

Advanced Micro Devices plans to make chips integrating its x86 with a graphics processor on a single piece of silicon by early 2009. The announcement came as AMD completed its US$5.4 billion merger with graphics chip manufacturer ATI Technologies on Wednesday.

The project, codenamed "Fusion," will lead to chips for a broad range of applications, from laptops to servers, AMD said.

PC manufacturers can already put a graphics processor next to the main processor on a PC's motherboard, rather than adding a dedicated graphics card in a PCI slot, allowing them to reduce the cost -- and size -- of their computers.

Packaging the main processor and graphics processor on one chip will take this integration further, and lead to a jump in power efficiency, AMD said. The Fusion chips could even show up in consumer electronics gadgets and products for emerging markets, where low cost and low power consumption are often important.

AMD won't shut the door on developers of coprocessors such as physics accelerators or high-end graphics chips for gamers: the Fusion chips will continue to support such external devices over the PCI Express bus, the company said.

Although AMD said it will take until late 2008 or early 2009 to build the Fusion chips, other fruits of its merger with ATI will show up sooner.

From 2007, AMD plans to deliver versions of its Turion 64 mobile processor more closely integrated with an external graphics processor, resulting in extended battery life for notebook computers, it said.

At the same time, the pending launch of Microsoft's Vista OS could also help to boost demand for high-end, three-dimensional graphics processing capability in consumer PCs.

"Vista is going to require a lot of graphics horsepower. In the past, 3D graphics was limited to games and CAD/CAM, but now it is a user experience with Aero," said Pat Moorehead, AMD's vice president for advanced marketing. In order to reveal glimpses of stacked folders, Vista's translucent 'Aero' windows demand much higher memory and graphics power than current PCs offer.

"That's a lesson of Vista, understanding that the future of computing is in 3D. You want your graphics processor and your CPU as tightly coupled to the memory as possible, so you don't have to sacrifice power efficiency or performance," Moorehead said.

For PC products, AMD will meet that need with Fusion, adding integrated graphics to its current PC chips used by vendors like Dell and Hewlett-Packard.

AMD also plans to use the ATI acquisition to reach further into the consumer electronics marketplace, extending its processor technology into cell phones, smartphones and gaming consoles. AMD hopes to leverage ATI's presence in the gaming market to land on new platforms like Microsoft's Xbox 360 and Nintendo Co.'s Wii.

"This is more about growth than about cost savings, so the things we're most excited about are that we have the management team in place, and we have a unified, worldwide sales force," Moorehead said. AMD has hired former ATI Chief Executive Officer David Orton as executive vice president, leading the new graphics and media division.

(Ben Ames in Boston contributed to this report)

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