October 25, 2006 10:55 AM PDT

AMD folds in ATI for graphics future

Advanced Micro Devices completed its $5.4 billion acquisition of ATI Technologies Tuesday, paving the way for its expansion into chipsets and graphics technology.

The company announced a project code-named Fusion that will aim to deliver a PC processor with an integrated graphics processor core by 2008 or 2009, as outlined earlier this year by AMD Chief Technology Officer Phil Hester. Before that becomes a reality, AMD will use ATI's expertise in chipset design to offer its customers the combination of a PC processor and a chipset, which has been Intel's strategy for several years.

One of the reasons behind the deal was AMD's desire to offer a more complete product to its PC customers. The chip maker is rubbing elbows with the big PC companies these days, nurturing an extensive portfolio at Hewlett-Packard and a growing presence inside Dell. Companies that ship millions of PCs like to have the option of purchasing a processor and a chipset, which connects the processor to the rest of the system, all in one transaction, Hester told CNET News.com in September.

AMD had relied on third-party companies like Nvidia and ATI for chipsets that worked with AMD processors, but it will now design and build those products itself with the acquisition of ATI's chipset technology. It's not clear whether the combined company will continue to make chipsets for Intel's products, which would make for an interesting exercise in diplomacy between the two chipmaking rivals.

But AMD also believes that graphics processors will become an even more vital part of a PC in future years, as more sophisticated games and multimedia applications are developed. It can now offer PC companies chipsets with built-in graphics as well as chipsets that accommodate ATI's more-powerful discrete graphics chips. Intel has become the largest supplier of PC graphics technology by shipping chipsets with basic integrated graphics technology good enough for mainstream PC users, eroding some of the market once held by Nvidia and ATI's separate graphics processors.

AMD took on more debt in order to complete the deal. It borrowed $2.5 billion in cash from Morgan Stanley Senior Lending in order to make the $4.3 billion cash payment to ATI's shareholders. It completed the deal by issuing 58 million shares of AMD stock to ATI shareholders, bringing the total value of the transaction to $5.4 billion.

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16 comments

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Two crappy companies for the price of one
I never had any good luck with AMD processors - they always overheated constantly causing me blue screens of death, or just burnt up completely. I was always ticked off by ATI's drivers too. Now I guess they will become one. I decided getting burned 3 times by AMD was enough and finally spent a little more money for Intel products with heat sensors.

Never have had problems return using Intel/Nvidia chips for the past several years.
Posted by doug526 (13 comments )
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Better Processors for 2/3 the price
I on the other hand am happy as can be with my AMD/ATI laptop. The exact same laptop with an Intel processor was $400 more. I have not had one iota of an issue and the laptop is used everyday for at least 10 hours per day. Like every other technology, it all comes down to choice. What makes you happy is always the best choice :)
Posted by jayhawk73 (61 comments )
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AMD chips are good chips!
I have no idea what doug526 did to his processors. Clearly he needs to keep his hands out of his computer case. AMD's processors have run cooler than anything Intel has had for years! They performed more functions per clock cycle and with less power consumption. I have used AMD processors for about ten years. I have never had one overheat or just burn up. I only had one to burn and it was because my cooling fan died first. The computer continued to run for quite a while after the fan died.
Posted by Cannon Fodder (1 comment )
Link Flag
uh..User error?
Not having luck with AMD processors is like saying my copy of windows crashed!! I have had a AMD 64 3500+ for a year with Geforce 6800 GS and it's awesome-no BSOD's yet. The time I bought it, AMD was kciking Intels' butt. The intel core two duo is only temporary, AMD is coming back. I would suggest a better look at power configuration, heat sinks and fans before blindly overclocking and heating up your procs. Just an FYI, the AMD 64's have excellent power saving algorithms. Even though I prefer Nvidia over ATI, the new X1900 is kicking Geforce 7000 SLI's ass for a lower price!!
Posted by adipolle (3 comments )
Link Flag
More like a crappy user
Doug526 are you serious? You are dumb. Sorry but AMD builds a great processor at a decent price. They typically run very cool. I am not going to say ATI is better than NVIDIA but I do beleive that they are evenly matched one is not much better than the other. Problems with Drivers? I don't get what you mean cause I have never had any issues using ATI drivers under windows or even Linux. I am definately an AMD user for life or well until Intel makes a product that competes against AMDs price and performance. Either way though the fact that these two companies have come together is great for the tech world. This will encourage new innovations and both sides will hopefully develop better products because of this.
Posted by rwscold (1 comment )
Link Flag
more like i'm too stupid to put heatsink compound on w/ correct fan
do you even know what you are doing?
Posted by baswwe (299 comments )
Link Flag
duh. use the correct heat sink compound and processor fan and it wont die
do you know what you are doin man?
Posted by baswwe (299 comments )
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Sounds more like incompetent user...
If you don't know how to build a PC then you should stick with Best Buy.
If you don't know how to install and/or debug drivers then again take it to someone that does.

All of us that have had positive experiences with AMD and ATI feel for you and if you ever find yourself with a technical problem that is over your head (ie; installing a heat sink/fan, ensuring case temperature not to high) please feel free to post so that someone can help you.
Posted by fred dunn (793 comments )
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Sounds more like incompetent user...
If you don't know how to build a PC then you should stick with Best Buy.
If you don't know how to install and/or debug drivers then again take it to someone that does.

All of us that have had positive experiences with AMD and ATI feel for you and if you ever find yourself with a technical problem that is over your head (ie; installing a heat sink/fan, ensuring case temperature not to high) please feel free to post so that someone can help you.

PS - Luck has nothing to do with it.
Posted by fred dunn (793 comments )
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AMD problems?
Sorry to burst your bubble, but the majority of people have zero problem with overheating AMD processors. But if you incorrectly install a heatsink, sure, anything could happen be it AMD or Intel!

I myself have been using AMD products since the AMD K6 and have not seen a problem. These processors included the K6-266 (Socket 7), Athlon 750 (Slot A), Athlon 1.33GHz and 1.4GHz (Socket A), and Athlon64 3200+ (Socket 754).

By the way - you do realize that many Pentium 4 CPUs have been known to run very hot, right?
Posted by ddesy (4336 comments )
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Hmmm
While I have not used ATI, I've used AMD CPUs for quite some time (up to the 3200XP chip) and never had the problems that you mentioned. The only problem that I had with an AMD CPU was when I fried it trying to overclock it...but then again, that was due to my own stupidity and not from anything else.
Posted by csturdivant (68 comments )
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And my choice is
that ATI works wonders for me. I've run video games that needed a minimum of a 64MB video card, that ran great on an ATI with only 4MB. True, that was awhile ago, but you've got to admit, that's not bad in a 500MHZ machine with only 32MB of system memory.
I can't say I've ever used an AMD processor before, and since my Mac uses an Intel Core 2 Duo, I don't think I will anytime soon.
Posted by Amazingant (146 comments )
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Wrong button.
I was trying to reply to jayhawk73's comment.
Posted by Amazingant (146 comments )
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They are going to crank out some jewels....
together, like integrated Athlon64 with video GPU that can be used as a video GPU or other programmable concurrent processor (ie;physics, encryption, etc).
They will also FINALLY give AMD some good reference platforms for Standardized Business Systems (where the system image can't change due to hardware changes for a life of 6 to 12 months).
I look for good things to come of this relationship especially in the laptop and mobile devices area for both of them.

Good fortune to both companies.
Posted by fred dunn (793 comments )
Reply Link Flag
So what?
I cannot honestly say I have ever used AMD, but from the lineups I have seen the only one that excites me is Intel because as it stands they are a step ahead of AMD. To me the company it comes from matters little, what matters is the quality of the product, and whats best at the time of purchase.

As far as ATI goes, I won't be moving to an ATI unless they end up producing something amazing, but from what I have seen nVidia pump out it seems highly doubtful that I will ever buy a ATI.

So back to my original question, So what? Does it really matter that the two merged and I honestly don't understand peoples loyalties to either company, why sell your soul to corporation when you should be keeping it to yourself, would you buy a lesser product at the same price or slightly less just because another company you dislike has a better product at the same price or a little more? Disliking them is no reason to not buy a better product for the same money. Its like not liking windows and still buying windows, just because you don't like it doesn't mean you don't buy it.

So stop the 'choose a side' crap already, it makes reading these news reports a pain in the ass because half the comments are people glorifying one or another company as the end all of products, in 20 years we will probably not even remember some of these companies and be laughing about how vintage all this stuff is anyways.
Posted by Rimer (24 comments )
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