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What does the future hold for AMD and ATI?

The AMD-ATI merger had been rumored for months. Many took it as wild speculation on a deal that would likely never come to fruition. Well, over the weekend the rumors became even more credible and yesterday AMD made the big announcement.

FiringSquad has also completed an interview with AMD and in addition received some colorful commentary from NVIDIA's Derek Perez; "So if you think about it, it’s kind of like ATI’s thrown in the towel right? Getting beat on both ends, looking for a way out, a little bit like 3dfx a few years back."  Of course, it should probably be mentioned that NVIDIA bought 3dfx. 

AMD executive vice president Henri Richard took the opportunity to sit down and talk with DigiTimes about the ATI acquisition and its plans for the future. In the interview, Richard talks about the perceived risk that AMD is taking by possibly biting off more than it can chew with the acquisition, what this means for AMD's relationship with NVIDIA and the company's plans for graphics in general. When asked if AMD motherboards would still use NVIDIA core logic, Richard replied "I surely hope so, absolutely." In an interview with Bytesector, Perez also assures us "We will continue to work with AMD to bring our brands to our mutual customers," but warns "We are now Intel's best GPU partner."

Cliff Edwards at BusinessWeek claims the writing is already on the wall for disaster.  AMD CEO Hector Ruiz stated that "We will move from being neighbors to being a family," to which Edwards immediately followed up with "the problem with families — especially those formed by multibillion-dollar corporate mergers — is that they often end up dysfunctional."  Edwards goes on to detail why the merger is great for NVIDIA and Intel, and detrimental for ATI and AMD.

Scott Wasson from TechReport has a very concise outline of the details surrounding the deal, Mercury Research claims "the holy grail of integration for ATI and AMD is going to be an integrated processor — a combination of a graphics processor and a processor," Forbes believes the mobile semiconductor industry will turn into a bloodbath, TSMC assured the world its manufacturing relations with ATI will continue business as usual, The Register believes an AMD-ATI system-on-a-chip is the only way for both companies to survive, and finally CRN has the definitive "no" as to whether or not AMD will produce its own line of motherboards based on ATI core logic.

And finally, Ken Fisher at Arstechnica warns that everyone should take a breather and lay off the rampant speculation, as the deal is still not even finalized.  Specifically Fisher claims "And when it comes to claims about motherboard licensing, ATI, NVIDIA, and chipsets, bear this one key point in mind: this is not a done deal."  However, if ATI does terminate the agreement at this point the company will have to fork over $162M dollars to AMD.


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Potential, but....
By Trisped on 7/26/2006 1:42:54 PM , Rating: 2
Yes, there is a lot of potential in the AMD+ATI merger, but not as much as everyone is letting on. In reality things will probably remain unchanged for a number of years.

Of course even more annoying then the rampant fan boy speculation is the idiotic ramblings of Derek Perez. I have never heard of someone who works in the actual hardware industry making such uninformed comments as:

"We are now Intel's best GPU partner."
“Ultimately this leaves us as the only GPU and platform company that will be able to support both AMD and Intel.”
“So if you think about it, it’s kind of like ATI’s thrown in the towel right?”
“And of course this has an interesting affect where we can look at this as an opportunity to accelerate our technology to market and kind of extend that lead over ATI.”

I didn’t know NVIDIA had a partnership with Intel, but I do know that ATI has one and that Intel has been fighting NVIDIA’s Motherboards for a number of years.
Just because ATI is being bought out by AMD doesn’t mean that ATI GPUs will no longer work on Intel boards. And from what I am seeing ATI is still making the RD600, so they are making Intel platforms too. If anything I bet Intel and ATI will keep their partnership, Intel providing the chipsets for the main streams and ATI providing the enthusiasts.
The problem with publicly traded companies is if someone wants to buy you out, you don’t really have a lot of choice in the matter. To accuse ATI of throwing in the towel seems a bit off. Worst case, ATI has a new parent company, best case ATI has a powerful partner in the CPU business that will turn the tables on ATI’s competition.
And as for “an opportunity to accelerate our [NVIDIA] technology…” what have you gained out of it? It isn’t like ATI will stop working until this is done. What it really sounds like is NVIDIA is scared so they are going to rush their products in hopes of staying compeditive.




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