Of analysts and rumors
At the very end of May, Forbes ran a short piece reporting analyst projections that AMD is looking to acquire graphics chip maker ATI. The article was essentially informed speculation, based ostensibly on some analysis of the graphics and processor markets and on the recent news that AMD is expanding their fab capacity. Nothing in the article suggested that the speculation had its basis in anonymous sources, leaks, or rumors, so the piece didn’t make much of a splash at the time.
Last week at Computex, however, Intel allegedly began telling folks behind closed doors that AMD is planning to acquire ATI. This news came courtesy of Tweaktown, who cited a “trusted and reliable anonymous source” for the claim. It wasn’t clear from Tweaktown’s report if Intel itself had heard a rumor to this effect, or if the company was reading the same tea leaves as the RBC Capital Markets analysts in the Forbes article and coming to the same conclusion. Finally, last Friday brought the following short note from our old friend Kyle Bennett at HardOCP:
Over dinner tonight in downtown Taipei it was explained to me that Intel was making the rounds with their customers explaining exactly how the AMD/ATI merger/acquisition was going to impact their business. Closure of the deal is expected to pass in 2 weeks.
This looks fairly definitive, but only time will tell if the rumor turns out to be true. As of this writing, the AMD-ATI merger/acquisition is still in the realm of informed speculation and anonymous sources. Nonetheless, that didn’t squelch our excitement over the possible deal here at the Ars Orbiting Headquarters. We think that an AMD-ATI fusion is a match made in enthusiast heaven, and in this article we’re going to tell you why it would work from both a technical and financial perspective.
Caught in the Crossfire
So what will it mean if the rumors are true? For one thing, it would mean that AMD would finally have an in-house source of core logic chipsets with the kind of features and quality that would better enable them to compete with Intel in the consumer market.
Before Intel started its "platformization" approach with the Centrino portable line, the company wasn’t really thought of as a chipset maker, even by many technical people. When people thought "Intel" they thought "CPU," despite the fact that Intel has long had the lion’s share of the PC chipset market. Intel is a chipset powerhouse, and their ability to offer a complete CPU + chipset solution with integrated graphics and networking gives them an edge in the consumer market that AMD currently cannot match.
AMD’s lack of a complete, homegrown chipset solution has long been a major weak spot, as those of us who’ve been burned by VIA chipsets can amply attest. Back before NVIDIA and ATI got into the AMD core logic chipset market, AMD users were stuck with whatever VIA produced. Even those who later opted for an AMD-made northbridge still turned to VIA for the southbridge (I/O hub) chip. Both NVIDIA and ATI eventually entered the market and produced solid AMD chipsets, with the former company occupying the higher end of the market and the latter left to the lower end… at least until recently.
When ATI launched their multi-GPU Crossfire Xpress 3200 chipset earlier this year, the graphics maker finally had a chipset that could compete with NVIDIA’s Athlon offerings. AMD’s acquisition of ATI would bring that new chipset line under AMD’s roof, giving AMD a complete chipset solution that could set the company on its way to competing with Intel in quality, price, and features.
It’s also important to note that Crossfire just isn’t selling well on Intel platforms. In fact, Intel won’t even be supporting Crossfire on their forthcoming series of enthusiast-oriented desktop chipsets, the 965 series. Right now, if you really want to do Crossfire, then you’ll be doing it with an Athlon FX rig. So if AMD and ATI join forces, ATI won’t really be losing anything in the way of Crossfire market share.
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