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Other companies interested in NVIDIA instead

DailyTech previously reported analysts believed NVIDIA was a prime candidate for an Intel acquisition. Other analysts predict Intel is unlikely to acquire NVIDIA. Nevertheless, there’s interest in NVIDIA from other tech companies. Joe Osha, an analyst for Merril Lynch stated “We don't think there's a solid rationale for a deal and we don't think it's going to happen." According to sources it would appear other industry players were interested in NVIDIA, though no formal negotiations have occurred.

Craig Barret, Intel Chairman had this to say about the rumors "We treat investments and things of that sort like fine wine and we never discuss them before their time, so we don't comment on rumors of that sort.” Other analysts such as Doug Freedman from American Technology Research remain skeptical over a possible Intel acquisition.

Speculation of a NVIDIA purchase rumors began popping up shortly after the AMD and ATI merger.




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RE: never going to happen
By akugami on 10/8/2006 3:39:16 AM , Rating: 2
I'm going to agree on the debt taken by AMD buying ATI. However, I'm going to disagree on your assumption that ATI does poorly in the market. There is no question in my mind nVidia does better however, ATI still makes a pretty penny and has about 35-45% of the discreet GPU market as well as a higher percentage of the integrated chipset market. Their share is usually in the upper 30's range and at times has reached the mid 40's and assuming they don't screw things up, it should remain similar. Granted nVidia does better but it's not like ATI is a company perennially in the red.

In fairness, ATI is going to lose a lot of integrated GPU/chipset sales on the Intel side of things but they should gain some sales in the AMD side to offset things. This actually has the potential to hurt nVidia as their integrated GPU and motherboard chipset business is mostly based on the AMD side of things. You can laugh about the profits for integrated chipsets and GPU's but when you consider the volume of such sales, it's a pretty penny indeed.

ATI does make a profit on discreet GPU's and there is absolutely no reason for AMD to shut this part of ATI's business down. I truly don't see how some people can predict nVidia having the discreet video card market to itself. Likely we will see the end of the "Built by ATI" cards but companies like ASUS, Sapphire, etc will pick up the slack. It basically comes down to why AMD would kill a cash cow? ATI likely doesn't have a positive cash flow, considering expenses spent, in it's discreet GPU business every quarter but at the end of the year, they usually come out with positive revenue after all.

As for how far behind ATI is to nVidia, last I heard from the rumor mill, they're set to release their next GPU in roughly Feb'07, give or take a bit. The G80 is set to be released in mid Nov so that would put ATI roughly 3 months behind assuming a Feb launch and if it's a March launch, they'd only be 4 months behind and not 9 months as you claim. Of course, this is based on assumptions on when AMD is going to launch their video card. If going by your schedule it'd be July of next year before ATI releases their next video card. I highly doubt that ATI will release their next video card in July'07.

Believe it or not, I don't think AMD buying out ATI will affect the discreet GPU market by any large amount. ATI will be following their own roadmaps for the next year to two years. I think AMD buying out ATI is more for their chipset business to sell to OEM's like Dell, HP, Sony, etc much like what Intel does now with their low end GPU's, motherboard chipsets as well as CPU's.

The other area is the specialized markets like servers, high end gaming, CAD, video special effects processing, or other high calculation intensive task that can take advantage of some of the designs of ATI's GPU's for tasks that today use the CPU. One example is the Folding@Home's newly released client that uses ATI GPU's for data processing.

There is also ATI's budding cell phone chipset business which if successful can pay huge dividends considering the increasingly powerful nature of smartphones and the increasing use of such smartphones in the place of PDA's and likely portable video and audio players.

Is it a huge risk for AMD? Absolutely, but ATI is trying to grow itself so it can better compete with Intel. It is not going to do it by relying only on people to switch to AMD chips. It has to go out and either create new markets for it's products or innovate enough in exhisting markets to make their products more compelling.

As for Intel, I don't see nVidia benefiting them much either. They are not interested in the discreet GPU business. Their aims are similar to some of the ones I outlined as reasons for ATI being bought by AMD. However, I think they are doing this with a combination of thier own in house GPU's and technology from lesser known companies. In that respect, it makes more sense for Intel to spend a few hundred million to a billion on lesser companies and funding it's existing departments rather than overspending for nVidia.


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