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  • AMD buys ATI

    There you go! Be careful, a paradigm shift is coming!!!



    Love is in the air today; chipmakers ATI(Nasdaq: ATYT) and AMD(NYSE: AMD) held their engagement party this morning, announcing that the two will forge the ties that bind in the fourth quarter of this year. In a combined cash and stock deal, AMD will pay out $16.40 in cash plus 0.2229 shares of its own stock in exchange for each ATI share (assuming that Canadian and U.S. regulation bodies -- plus a majority of ATI shareholders -- approve of the union).

    It's a long-anticipated merger, and it creates a company with the ability to provide every significant chip in an entire PC, something Intel(Nasdaq: INTC) has been doing for years. That includes the main processor from AMD, and core logic chipset and graphics from ATI. Plus it opens up the possibility of combining elements from each company's design philosophies into entirely new processing units.

    In fact, that opportunity was stressed repeatedly in the conference call, where management went so far as to say that a paradigm shift is coming, and that in 2008, AMD/ATI will change the way we think about the concept of processing. It's a bold claim, and I expect that it's somehow related to plugging modules with new capabilities into the Torrenza platform, also known as Socket AM2. ATI has already proven that its chips can handle tasks such as advanced physics processing, in addition to the graphics crunching for which they were designed. Expanding that to other specialized fields would make a lot of sense, and could indeed transform data processing -- much like the floating-point coprocessor did in the mid-90s.

    The marriage leaves a couple of jilted partners by the wayside, and it will probably bring Intel and Nvidia(Nasdaq: NVDA) closer together. AMD will continue to support the entire ATI product line, including chipsets for Intel processors, though rumor has it that Intel will withdraw ATI's license to build them. If so, that would put AMD CEO Hector Ruiz' words in a new light, since he said that ATI provides a compelling platform for Intel, and that he expects Intel to want what's best for the customer.

    AMD is heading into a brave new world with this acquisition, one of high-growth cell phone and handheld computing graphics, high-margin entertainment set-top boxes, and (of course) high-revenue mainstream PC graphics. The focus on the entertainment opportunity makes AMD's recent divestiture of its Alchemy line of embedded processors all the more curious, but perhaps the company is planning to move its mobile architectures down into the embedded space. Then again, maybe ATI brings a surprise to the wedding. Here's a fistful of bird seed, and I wish the happy couple all the best.
    Let us be lazy in everything, except in loving and drinking, except in being lazy – Lessing

  • #2
    Interesting I hope this brings AMD to full fledged competitorship with Intel ...
    <Reverend> IRC is just multiplayer notepad.
    I like your SNOOPY POSTER! - While you Wait quote.

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    • #3
      Not sure how I feel about this. How well will Nvidia solutions work with AMD systems? We'll see.
      "The issue is there are still many people out there that use religion as a crutch for bigotry and hate. Like Ben."
      Ben Kenobi: "That means I'm doing something right. "

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      • #4
        I sure don't like this at all
        This space is empty... or is it?

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        • #5
          I also kinda liked how ATI was a Canadian company...now it's American. :/
          "The issue is there are still many people out there that use religion as a crutch for bigotry and hate. Like Ben."
          Ben Kenobi: "That means I'm doing something right. "

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          • #6
            Originally posted by Asher
            I also kinda liked how ATI was a Canadian company...now it's American. :/
            are you ****ing kidding me?
            "I hope I get to punch you in the face one day" - MRT144, Imran Siddiqui
            'I'm fairly certain that a ban on me punching you in the face is not a "right" worth respecting." - loinburger

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            • #7
              Some highlights of a AMD/ATI conference call

              * Focus on consumer electronics and product integration.
              * Keeping Toronto as a Center of Excellence. No major layoffs expected.
              * "Expecting ATI's GPU business to compete with Nvidia's in the marketplace".
              * "We realize that we will lose some of ATI's revenue on the Intel platform".
              * ATI's relations with foundries is an opportunity to use them for other projects.
              * Won't expand fabs in order to fit in all of ATI's products internally.
              * Opportunity to in-house some of it to maximize foundry utilization in 1-2 years.
              * Major goal is to gain CPU share through better platforms and ecosystems.
              * One percent of the CPU market is $300M at 60% margins. So synergy is there.
              * Committed to open competition through customer choice and open platforms.
              * ATI's products and relationships will help in the notebook segment.
              * Planning single-die CPU/GPU integration, but not for all segments.
              * Biggest short-term growth opportunities: Mobility and Commercial.
              * Margins will initially be down initially, but will go back up to 51-56%.
              * Strong commitment from AMD for DTV and Handsets. Faster time-to-market.
              Let us be lazy in everything, except in loving and drinking, except in being lazy – Lessing

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              • #8
                This will just be a distraction, when Intel is showing a resurgence. Not a good move, IMO.
                I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

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                • #9
                  Not sure how I feel about this. How well will Nvidia solutions work with AMD systems? We'll see.
                  I suspect that AMD will lose customers in the meantime because it's going to disrupt their cashflow, and therefore their ability to keep cutting prices against the superior Intel platform. On the other hand, both companies will presumably be able to share fabs, thus eliminating something that is holding them back against Intel and nVidia respectively. Will be interesting to see what happens....

                  Long term though, I think that if AMD may be able to use some of ATi's technology as part of a new architecture design but only time will tell.

                  In the meantime, surely it's not healthy for the PC market to have Intel machines more inclined to use nVidia, and AMD machines inclined to use ATi? If you assume that there are respective performance advantages to using an nVidia GPU with an Intel CPU and vice versa, surely that reduces consumer choice?
                  "I work in IT so I'd be buggered without a computer" - Words of wisdom from Provost Harrison
                  "You can be wrong AND jewish" - Wiglaf :love:

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                  • #10
                    Eh, why would there be advantages to that? Other than the slightly cheaper AMD-based Crossfire boards, and presumably slightly cheaper Intel-based SLI boards, why would there be a significant difference in performance? Unless they start making AMD chips with graphics processors built in, which they claim to want to do, but ... nah. Not now, anyway. Ultimately, if they can do this, that's probably for the better, anyway... I don't see it being likely they make processor optimizations for specific GPU processors any time soon.
                    <Reverend> IRC is just multiplayer notepad.
                    I like your SNOOPY POSTER! - While you Wait quote.

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                    • #11
                      Originally posted by MRT144
                      are you ****ing kidding me?
                      No, because this means they're less likely to expand Canadian operations if AMD buys them up. Rather than opening another R&D facility in Ottawa or Vancouver or Calgary, it'll be in Austin, TX or something...

                      And for a Canadian in that field, that thought does worry me. I would never move to Texas or the vast majority of American states.

                      I recently had an interview with ATI for their Markham, Ontario office, and I'd wonder if that job would still even be open.
                      "The issue is there are still many people out there that use religion as a crutch for bigotry and hate. Like Ben."
                      Ben Kenobi: "That means I'm doing something right. "

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                      • #12
                        Maybe over the long run it would work out as you say, but IIRC AMD has lots of R&D operations in Germany. It's not as if they're overpartial to the States.
                        I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

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                        • #13
                          I'm not sure they have lots of R&D facilities there, I was under the impression the real R&D work was done in Texas.

                          They have a massive multi-billion dollar Fab plant there in Dresden, and the reason it's there is because of massive incentives from the German government.
                          "The issue is there are still many people out there that use religion as a crutch for bigotry and hate. Like Ben."
                          Ben Kenobi: "That means I'm doing something right. "

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                          • #14
                            Should we short nVidia stock?
                            Christianity: The belief that a cosmic Jewish Zombie who was his own father can make you live forever if you symbolically eat his flesh and telepathically tell him you accept him as your master, so he can remove an evil force from your soul that is present in humanity because a rib-woman was convinced by a talking snake to eat from a magical tree...

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                            • #15
                              Unless you haven't been shorting commodities already.
                              DISCLAIMER: the author of the above written texts does not warrant or assume any legal liability or responsibility for any offence and insult; disrespect, arrogance and related forms of demeaning behaviour; discrimination based on race, gender, age, income class, body mass, living area, political voting-record, football fan-ship and musical preference; insensitivity towards material, emotional or spiritual distress; and attempted emotional or financial black-mailing, skirt-chasing or death-threats perceived by the reader of the said written texts.

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