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AMD seen close to $5.5 billion chip deal

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  • AMD seen close to $5.5 billion chip deal


    PHILADELPHIA (Reuters) -- -- Advanced Micro Devices, the No. 2 supplier of computer processors, is close to a deal to buy graphics chip maker ATI for $5.5 billion, a source familiar with the situation said on Friday.

    Any such deal would shake up the processor industry, which is witnessing a battle over market share between AMD and larger rival Intel (Charts).

    ATI (Charts) is one of two major graphics chips makers, along with rival Nvidia (Charts), and is a big supplier of chipsets - the cluster of secondary chips and interfaces that surround a computer's processor - to both AMD and Intel.

    Unless talks break down, a deal could be announced as early as Monday, the source said.

    ATI declined to comment, and an AMD spokesman could not be immediately reached for comment.

    Shares of ATI rallied on Friday on renewed speculation that a deal was close at hand.

    After gaining 83 cents, or 5.3 percent, to close at $16.56 on the Nasdaq market in regular trade, the shares jumped another 7 percent to $17.68 in after-hours trading on Inet. On the Toronto Stock Exchange, the stock finished 99 Canadian cents higher at C$18.77.

    Rumors that AMD could purchase the Canadian graphics chip maker surfaced in late May when an analyst suggested the move could make AMD more competitive with Intel. The speculation sent ATI shares surging about 10 percent.

    Some analysts have questioned the rationale for an AMD-ATI merger, and others were surprised that the speculation received no attention from analysts during AMD's earnings conference call on Thursday.

    AMD shares closed at $18.26, down $3.39, or 15.7 percent, on the New York Stock Exchange as investors worried that the company would not be able to continue grabbing market share from Intel.
    I wonder how this will impact computers?
    How'd I get so white and nerdy?

  • #2
    Re: AMD seen close to $5.5 billion chip deal

    It happened

    Who else currently has an AMD processor with an ATI video card? (well, I have one by Sapphire-ATI, but close enough.)

    EDIT: In a shock to no one, a few days ago, ATI had its chipset bus licence pulled, or at least not renewed by Intel. I guess that means that AMD won't be making many chipsets for Intel in a year or so.
    Last edited by adrian; July 24, 2006, 08:17 AM.
    How'd I get so white and nerdy?


    • #3
      Re: AMD seen close to $5.5 billion chip deal

      More bad news for Intel:

      So, there’s an upcoming launch event for Conroe as many of you know. We’re very excited to launch our Conroe systems at the event – and we were supposed to have a system on stage with ATi. Apparently this isn’t happening anymore – ATi has been removed from the event and I suspect that Intel is changing the configurations of all the machines based on the feedback I’ve been hearing. I don’t understand the reasoning behind this - because we all know that ATi Crossfire works on the 975 chipset and there’s no doubt in my mind that we will sell a ton of Crossfire configurations with Intel Core 2 Duo. ATi will continue to make chipsets for Conroe configurations (at least for the current generation) so it’s too bad it had to end like this.

      Looks like AMD dealt its trump card and is messing Intel up real bad.
      How'd I get so white and nerdy?