AMD to acquire graphics chip giant ATI
AMD on Monday upped the ante in its fierce battle with rival Intel Corp., announcing that it plans to acquire graphics chip maker ATI Technologies in a part stock, part cash transaction valued at $5.4B.
The combined company "will create a processing powerhouse by bringing AMD's technology leadership in microprocessors together with ATI's strengths in graphics, chipsets and consumer electronics," the two companies said in a statement.
AMD, the world's second largest chip makrer, is hoping the acquisition will leverage its position within the microchip industry, allowing it to expand beyond computational processors for PC systems as it strives to tear additional market share away from world leader Intel Corp.
By 2008, AMD said it plans to move beyond current technological configurations to transform processing technologies, with silicon-specific platforms that integrate microprocessors and graphics processors to address the growing need for general-purpose, media-centric, data-centric and graphic-centric performance.
"ATI shares our passion and complements our strengths: technology leadership and customer centric innovation," said AMD Chairman and CEO Hector Ruiz. "Bringing these two great companies together will allow us to transcend what we have accomplished as individual businesses and reinvent our industry as the technology leader and partner of choice."
Under the terms of the transaction, unanimously approved by both companies' board of directors, AMD will acquire all of the outstanding common shares of ATI for a combination of $4.2 billion in cash and 57 million shares of AMD common stock, based on the number of shares of ATI common stock outstanding on July 21, 2006.
Based upon the closing price of AMD common stock on July 21, 2006 of $18.26 a share, the consideration for each outstanding share of ATI common stock would be $20.47, comprised of $16.40 of cash and 0.2229 shares of AMD common stock.
The Sunnyvale, Calif.-based AMD said it plans to finance the
cash portion of the transaction with the help of a $2.5B loan from Morgan Stanley.
Graphics processors from ATI have been used in personal computer systems from Apple Computer throughout the years. Although Apple turned away from ATI several years ago in favor using graphics chips from Nvidia Corp., the company's recent transition to Intel microprocessors has signaled the return of ATI as the primary supplier of graphics chips for the company's Mac line.
The combined company "will create a processing powerhouse by bringing AMD's technology leadership in microprocessors together with ATI's strengths in graphics, chipsets and consumer electronics," the two companies said in a statement.
AMD, the world's second largest chip makrer, is hoping the acquisition will leverage its position within the microchip industry, allowing it to expand beyond computational processors for PC systems as it strives to tear additional market share away from world leader Intel Corp.
By 2008, AMD said it plans to move beyond current technological configurations to transform processing technologies, with silicon-specific platforms that integrate microprocessors and graphics processors to address the growing need for general-purpose, media-centric, data-centric and graphic-centric performance.
"ATI shares our passion and complements our strengths: technology leadership and customer centric innovation," said AMD Chairman and CEO Hector Ruiz. "Bringing these two great companies together will allow us to transcend what we have accomplished as individual businesses and reinvent our industry as the technology leader and partner of choice."
Under the terms of the transaction, unanimously approved by both companies' board of directors, AMD will acquire all of the outstanding common shares of ATI for a combination of $4.2 billion in cash and 57 million shares of AMD common stock, based on the number of shares of ATI common stock outstanding on July 21, 2006.
Based upon the closing price of AMD common stock on July 21, 2006 of $18.26 a share, the consideration for each outstanding share of ATI common stock would be $20.47, comprised of $16.40 of cash and 0.2229 shares of AMD common stock.
The Sunnyvale, Calif.-based AMD said it plans to finance the
cash portion of the transaction with the help of a $2.5B loan from Morgan Stanley.
Graphics processors from ATI have been used in personal computer systems from Apple Computer throughout the years. Although Apple turned away from ATI several years ago in favor using graphics chips from Nvidia Corp., the company's recent transition to Intel microprocessors has signaled the return of ATI as the primary supplier of graphics chips for the company's Mac line.
Comments
Originally posted by krankerz
Well, I guess my MacBook Pro is now obsolete. Can't wait to get one with an AMD CPU next year!
I can't agree with that.
Well, I guess my MacBook Pro is now obsolete. Can't wait to get one with an AMD CPU next year!
I can't agree with that.
Both of you two sure know what good dialog is
about. Drama, conflict and revealing the neccessary info
at the latest point possible. That keeps the tension up.
Originally posted by Vox Barbara
Both of you two sure know what good dialog is
about. Drama, conflict and revealing the neccessary info
at the latest point possible. That keeps the tension up.
Yes, and your post added to it.
Originally posted by krankerz
Well, I guess my MacBook Pro is now obsolete. Can't wait to get one with an AMD CPU next year!
Can't wait to see a real laptop CPU from AMD first. The Turion 64 is a nice try, but it's gonna need lots and lots of refinement.
Originally posted by AppleInsider
Although Apple turned away from ATI several years ago in favor using graphics chips from Nvidia Corp., the company's recent transition to Intel microprocessors has signaled the return of ATI as the primary supplier of graphics chips for the company's Mac line.
Not any more... heh heh.
I prefer ATI video cards to NVidia, I hope this doesn't mean Apple will stop using ATI out of loyalty to Intel.
I'm thinking it will mean just that. Check this news out for example: Intel pulls ATI (AMD)'s Chip license.
I'm actually happy about this announcement because if this means anything, is apple will use more nvidia chips. I'll take more performance and easier use any day!
Worst-case possibilities:
* Intel keeps their lead, but AMD refuses to sell ATI graphics to PC makers (like Apple) who buy from Intel. They are forced to use nVidia or settle for lesser chips from AMD.
* Or Intel keeps their lead, but refuses to sell CPUs to PC makers (like Apple) who use ATI graphics. They are forced to use nVidia or settle for AMD.
* Or AMD develops new CPUs to rival anything from Intel, even for laptops, but Intel punishes severely or turns away companies who use both kinds of processors--they want only exclusive customers. Apple is forced choose either one super-fast processor family or the other, they can't pick from both at once.
All of the above seem unlikely, especially since Intel is so vocal about WANTING to work with Apple. Bullying Apple is not something Intel can do lightly.
Best-case possibilities:
* AMD develops new CPUs to rival Intel. And, like other PC makers, Apple can choose to use CPUs from BOTH companies. Two suppliers are better than one. (Exclusive deals might be lost--which can mean higher prices. Competition would increase--which can mean lower prices.)
* Or AMD develops new ATI graphics technologies that nVidia can't touch, and Apple can use those new GPUs too.
* Or AMD develops low-cost integrated graphics with better performance than Intel. And Apple can use those too.
* Or AMD and ATI push Intel and nVidia to do even more, releasing even better products. The resulting competition helps everyone.
I'm not too dismayed at this point. ATI and Intel are compatible
ot to stray away from the conversation, but...
Worst-case possibilities:
* Intel keeps their lead, but AMD refuses to sell ATI graphics to PC makers (like Apple) who buy from Intel. They are forced to use nVidia or settle for lesser chips from AMD.
* Or Intel keeps their lead, but refuses to sell CPUs to PC makers (like Apple) who use ATI graphics. They are forced to use nVidia or settle for AMD.
* Or AMD develops new CPUs to rival anything from Intel, even for laptops, but Intel punishes severely or turns away companies who use both kinds of processors--they want only exclusive customers. Apple is forced choose either one super-fast processor family or the other, they can't pick from both at once.
All of the above seem unlikely, especially since Intel is so vocal about WANTING to work with Apple. Bullying Apple is not something Intel can do lightly.
Best-case possibilities:
* AMD develops new CPUs to rival Intel. And, like other PC makers, Apple can choose to use CPUs from BOTH companies. Two suppliers are better than one. (Exclusive deals might be lost--which can mean higher prices. Competition would increase--which can mean lower prices.)
* Or AMD develops new ATI graphics technologies that nVidia can't touch, and Apple can use those new GPUs too.
* Or AMD develops low-cost integrated graphics with better performance than Intel. And Apple can use those too.
* Or AMD and ATI push Intel and nVidia to do even more, releasing even better products. The resulting competition helps everyone.
I'm not too dismayed at this point. ATI and Intel are compatible
ramblings of a mad man...
*bows*
End of topic, thanks for listening.
How about "nothing whatsoever changes for Apple".
*bows*
End of topic, thanks for listening.
i concur...
Originally posted by nagromme
Not to stray away from the conversation, but...
Worst-case possibilities:
* Intel keeps their lead, but AMD refuses to sell ATI graphics to PC makers (like Apple) who buy from Intel. They are forced to use nVidia or settle for lesser chips from AMD.
* Or Intel keeps their lead, but refuses to sell CPUs to PC makers (like Apple) who use ATI graphics. They are forced to use nVidia or settle for AMD.
* Or AMD develops new CPUs to rival anything from Intel, even for laptops, but Intel punishes severely or turns away companies who use both kinds of processors--they want only exclusive customers. Apple is forced choose either one super-fast processor family or the other, they can't pick from both at once.
All of the above seem unlikely, especially since Intel is so vocal about WANTING to work with Apple. Bullying Apple is not something Intel can do lightly.
Best-case possibilities:
* AMD develops new CPUs to rival Intel. And, like other PC makers, Apple can choose to use CPUs from BOTH companies. Two suppliers are better than one. (Exclusive deals might be lost--which can mean higher prices. Competition would increase--which can mean lower prices.)
* Or AMD develops new ATI graphics technologies that nVidia can't touch, and Apple can use those new GPUs too.
* Or AMD develops low-cost integrated graphics with better performance than Intel. And Apple can use those too.
* Or AMD and ATI push Intel and nVidia to do even more, releasing even better products. The resulting competition helps everyone.
I'm not too dismayed at this point. ATI and Intel are compatible
Great analysis. Except the worst-case scenarios are completely unrealistic, and the best-cases just bypass the fact that there's almost definitely an exclusive, long-term contract with Intel. I seriously doubt Apple would just be able to jump to AMD. Add to that the fact that you imply that OS X doesn't need any updates or optimizations to work with AMD rather than intel.
If Intel forces Apple to use Nvidia again, big deal, it's not like Apple is using top of the line ATI-stuff atm to which no Nvidia can compare.
Originally posted by Louzer
Add to that the fact that you imply that OS X doesn't need any updates or optimizations to work with AMD rather than intel.
Does it?
i think Apple will continue to use ATI/AMD graphics. AMD doesn't want to lose ATI's current customers, and Intel isn't gonna turn their back on Apple just for buying from AMD. That'd be dumb.
Originally posted by Louzer
*snip* I seriously doubt Apple would just be able to jump to AMD. Add to that the fact that you imply that OS X doesn't need any updates or optimizations to work with AMD rather than intel.
OS X wouldn't need any updates or optimizations to run on AMD rather than Intel. Processor-wise, their new models both support the same feature set (SSE3, etc.). If this weren't true, people would not be getting OS X to run on their generic AMD PCs. It's not like Windows XP required special optimizations to run on AMD chips - AMD chips have been designed from day one to be a 100% compatible competitor to Intel chips.
The only problem would be getting drivers for AMD motherboard chipsets. If Apple were to sell both AMD and Intel systems, they could likely use some kind of chipset like the new nForce models that are used in both types of motherboards so they wouldn't need to write as many drivers.
There have been mutterings that ATI have developed an API for their GPU's so that you can use them as a DSP for music, Video processing like AVIVO, or massive FPU performance (for 3d rendering like Lightwave, Cinema4d), or physics calculations.
Meanwhile, there have been mutterings that AMD wants a DSP to connect to their Opterons/X2's using hypertransport in the second AM2 slot, - either a second CPU, or a custom DSP - like a GPU with special API.
Put 2 and 2 together and this screams...
Originally posted by Louzer
the fact that there's almost definitely an exclusive, long-term contract with Intel. I seriously doubt Apple would just be able to jump to AMD.
There may well be an exclusive contract, but I doubt there would be one that's REALLY long term. Because a) Apple wouldn't want to sign one, especially after being burned by CPU vendors in the past. And b) Intel wouldn't play hardball because they've really wanted Apple as a customer for some time. And c) There's no need for Intel to worry in the short-term anyway: Core 2 is that good!
Beyond the short term, looking ahead a few years--which is the soonest I see there being any big threat to Intel caused by ATI joining AMD--I think Apple will have the freedom to shop around.
Imagine in 2008, if AMD comes out with a chip twice as fast as Intel's best, and Intel has nothing in the pipeline... I bet Apple would go to great lengths to get out of any exclusive relationship with Intel. And we'd reap the benefits
Now, I don't think such a dramatic scenario is likely, of course.
Originally posted by krankerz
Well, I guess my MacBook Pro is now obsolete. Can't wait to get one with an AMD CPU next year!
AMD has minimal focus on low power computing, an area that Intel has sunk billions into. This is why they're so far ahead of AMD in the laptop/Small-PC market. I don't see AMD posing a threat anytime soon. Intel is also pulling well ahead of TSMC in fab technology, which is only going to further separate them from the rest of the low-power market.
It will be interesting to see if AMD is even permitted to purchase ATI. Big mergers and buyouts are always investigated by the regulatory agencies. Nonetheless, AMD and ATI are both pretty good shops, and if I were a betting man, I'd bet that one of AMD's primary goals with buying ATI is to develop a cell-like line of processors as a high-end extension of their Alchemy line. Doing so would make them a major presence in markets they've had some difficulty with in the past.