AMD buying ATI for $5.4 billion

After months of speculation, including a period when it looked like the supposed deal was surely dead, AMD has now officially announced plans to buy graphics giant ATI for $5.4 billion. The sale, which is scheduled to be completed in the fourth quarter pending shareholder, regulatory, and court approval, will result in AMD paying $20.47 (in a mix of cash and stock) for each share of ATI. As you might expect, the news sent ATI's stock price skyrocketing, while shares of AMD dropped due to investor concern that the semiconductor manufacturer is overpaying for its purchase. AMD CEO Hector Ruiz cited his company's burgeoning relationship with Dell as one of the main reasons for the merger, as the newly-formed entity may now be able to snatch even more Dell business away from rival Intel. Some analysts, however, feel that the deal will have negative consequences in the short term, as it may distract both companies -- already struggling to compete on performance -- from pushing out innovative products in their respective categories. Still, the fact that AMD will now be able to offer integrated graphics solutions to PC manufacturers in the same manner as Intel should be enough to help it gain market share in the long run. Either way, we can't wait to see what the new company has in store for us...

[Thanks, Karl]

[Jonathan Keim @ Jul 24th 2006 9:14AM]

Man! I would have boughten one of the stocks if I knew which one would go up! I should have talked on some stock boards and found out :(

[Intrepid @ Jul 24th 2006 9:27AM]

Woohoo! I hope that they create some great integrated systems!

[Smeagol @ Jul 24th 2006 9:42AM]

The integrated graphics from AMD-ATI cant be worse than the crap Intel offers.

[MooNKighT @ Jul 24th 2006 9:51AM]

Let our powers combine ;) .I hope they don't screw it up because this can be COOL.I think it will bring a new dimension to the GPU and CPU wars.Lets see how Intel and nVidea react.

[Matt Gross @ Jul 24th 2006 9:53AM]

I wonder how this will play out with Apple, since they use Intel CPUs and ATI GPUs, could we be seeing NVidia chips back with Apple?

[Rick @ Jul 24th 2006 10:04AM]

oh man FX-based GPU's. flippin sweet.

[Simon @ Jul 24th 2006 10:06AM]

This is excellent news, I have always felt that AMD and ATI match each other. Maybe it's the 3 letter acronyms both starting with the letter A that is confusing me, but I have always felt some-what of an ATI-AMD affinity. I think that AMD makes damn good cutting edge stuff, and has been battling hard to build it's reputation for quality, reliability and performance. The same goes for ATI.

I wouldn't be surprised if they bought out (merged with) a motherboard manufacturer, enabling them to do some fancy complete solutions!!!

Who do you think would suite them??

I think that Asus would be a good match!!!

All they woule need after that would be to hook up with the likes of SUSE or create their own fancy pants flava's of the L and they can produce a full system from one company.

It sounds like lunacy, but u see car manufacturers hooking up and sharing tech and skills all the time. In hard lean years, this is the trend for companies and such a combination could end up being a super slick package.

[hj @ Jul 24th 2006 10:12AM]

I wonder what affect this will have on AMD's great relationship with Nvidia.

[micheal @ Jul 24th 2006 10:17AM]

Nvidia has always felt that they are a chip-maker and actually view themselves as Intel's other competition. While Intel's graphics are good for non-gaming use, as users move to Vista and other graphically-intensive operating systems, I wouldn't be suprised if Intel and Nvidia are already talking about a buyout. This would secure better embedded graphics and also optimize graphics for Intel-based system. On the scary side, if Intel had that kind of power, would they de-optimize systems using AMD/ATI graphics chips?

T'would be funnier if Apple bought Nvidia. :)

[ty @ Jul 24th 2006 10:23AM]

At first I thought this was a bad idea. AMD is heavily dependent on Nvidia chipsets and an amd + nvidia merger would make more sense. THen I looked at it from beyond the desktop market, the mobile market. Laptop sales now exceed desktop sales and ATI has a better integrated graphics solution than nvidia. Most of the Turion notebooks out there use ATI's x200 integrated graphics and it destroys intel when it comes to integrated performance. For the mobile solution this merger makes sense.

[MooNKighT @ Jul 24th 2006 10:29AM]

This probably will hurt AMD and nVidia relationship since they are now direct competitors and at the same time it will throw sand in the eyes of Intel specially since AMD President Dirk Meyer also said that in addition to multi-processor platforms, that 'as we look towards ever finer manufacturing geometries we see opportunity to integrate CPU and GPU onto the same [die].'
I wonder if this has anything to do with their ppu asperations.
In less than a week we've had two major announcements,I thought summer was supposed to be slow :)

[TeddyN @ Jul 24th 2006 10:31AM]

Hmmm, I like being able to choose which graphics card I want seperately from which CPU I want. I'm scared that AMD + ATI will change that by 'optimizing' (ie restricting) the two to working with each other.

[Levon @ Jul 24th 2006 10:35AM]

Hey -

GREAT deal!

Now, finally, can these two put POWERFUL Graphics
pipeline chips ON THE MOTHERBOARD!!! Many of us have
been WAITING and WAITING for the nVidia (or ATI or
whoever) power to be just simply put in the system!

Sure - the "powers that be" can make their margins
by selling high-end (read: 50+% margins boards to
gamers, however, VISTA and Google Earth require
SERIOUS graphics - "what have you done for me lately?"

GIVE US (EVERYONE IN 6-15 MONTHS) MORE GRAPHICS POWER!

NOW!!!!!!!!!!!!!!!!

Zamalek

[Brandon Watts @ Jul 24th 2006 10:41AM]

Despite some of the concerns, I truly believe that this move is going to prove to be a huge win for both sides.

[Alex @ Jul 24th 2006 10:50AM]

I am so pissed I was out of town until today, or I would have bought ATI stock. Grrrr

[Matias Korhonen @ Jul 24th 2006 11:07AM]

Hurrah!

Been waiting for this for a while now.


Will there be an Intel-Nvidia merger next? I doubt it, the anti-trust agencies would probably never allow it, due to Intel's share in the chip markets...

[Ian Jardine @ Jul 24th 2006 11:07AM]

ATI(ATYT) have never been as profitable as Nvidia, so their management appear to have "given up" being a standalone challenger to the Nvidia. Presumable AMD & ATI think they can take out costs (AMD do the fabrication?) and incorporate decent low to mid class graphics integral with CPUs.
However, surely not all AMD CPU buyers will want ATI chipsets and the degree to which Nvidia will want to share technology with AMD will now be reduced. Thus unless AMD are very clever maybe this can back fire?
Meantime it will behove Intel to be VERY OPEN with Nvidia and also cements the Nvidia relationship with the CELL chip owners.
If anything this puts Nvidia in a very interesting and perhaps profitable situation. They are a nicely profitable standalone graphics company.

Inote that is the AMD/ATI deal falls through that ATI will pay $164mm compensation to AMD! Wow shouldn't this be the other way around? Tells me this deal was lead by ATI approaching AMD to make the deal....... So they must have felt that their future was more risky standalone than linking with AMD, as the latter now faces massive challanges from Intel the new new Conroe and other new CPUs.
Risky stuff?
All IMHO of course.

[diulei @ Jul 24th 2006 11:22AM]

Very very interesting! Will be nice to see what they produce in the future.

[RacetrackOwner @ Jul 24th 2006 11:49AM]

It'll be nice if AMD can finally produce some stable ATI drivers...

[Mack Swift @ Jul 24th 2006 11:53AM]

I know AMD has coprocessor tech working for it's CPUs and chipsets on the 1U and 2U Opteron server racks. You have a Athlon X2 in one socket and in the other identical socket a special co-processor for whatever your needs are. It makes for a very flexible platform.

I think this is where AMD and ATI are heading; especially with the upcoming 4x4 platform. Put a quad-core CPU in one socket, a dual-core GPU in the other identical socket; each chip uses the same type of cooling fan and clamps (cost saving).

If they can make an easily adaptable accross the board platform for desktops, workstations, and servers; they can snag a sweet OEM contract.

[ty @ Jul 24th 2006 11:57AM]

re: Ian Jardine, "Cements the nvidia relationship with Cell chip owners"

Who would these people be? People who plan to buy a ps3? It's not like they have a choice as to which gpu their ps3 will have.

[tiuk @ Jul 24th 2006 12:12PM]

I've been using AMD/nVideo combinations since 2001, hope this doesn't change things too much.

[DMAN @ Jul 24th 2006 12:15PM]

I can't wait for graphics to share that HyperTransport 3.0 bus or whatever the future may hold. It will achieve damn fast graphics processing. Torrenza technology from AMD will show the light.

[Aaron @ Jul 24th 2006 12:27PM]

ATI has always had better cards IMHO, their drivers are terrible, and a card unfortunately is as good as its drivers. Nvidia has great drivers for their cards, but not as poerful IMHO.

I started hating Nvidia the day I found out that the only reason they bought out 3dfx was to kill the competition. 3dfx had the best 3d and tv/video cards.

I have always like AMD better than Intel, and now is the time for me to start thinking about buying ATI cards again, and make the switch back.

[AndrewNeo @ Jul 24th 2006 12:56PM]

I seriously doubt they'd change the shelf products in any way. We might start seeing integrated systems, but I'm sure the ATi part will keep pumping video cards and AMD will keep pumping out processors. If anything, AMD may contribute to GPUs, and with a processor-maker in the play we may see even more powerful graphics cards, forcing nVidia to compete harder.

And maybe if we're lucky, AMD will flush out some nicer linux support for ATI cards.

[TrueDis @ Jul 24th 2006 12:57PM]

I think saying that ATI stock is "skyrocketing" is definitely an overstatement...

[tony @ Jul 24th 2006 1:57PM]

nVideo? What crappy company is that? :-)

[Baba @ Jul 24th 2006 2:05PM]

I hope their integrated solution is better than Intel's "Extremely shi*tty graphics" processors...

[K MAN @ Jul 24th 2006 2:13PM]

http://www.bit-tech.net/news/2006/07/24/intel_pulls_ati_chipset_license/

[kompression @ Jul 24th 2006 3:21PM]

When AMD's CEO was asked about their relationship with Nvidia on the conference call he said that AMD welcomed the competition. If I remember correctly for the past few years or so didn't Nvidia's Nforce pretty much help make AMD what it is today? The proof is with SIS and Via. Those companies suck and don't help AMD one bit. I doubt ATI's offerings can do better in the short run. Basically I would think that the relationship between AMD and Nvidia was stronger than AMD doing buyout of ATI. Did AMD really make this decision from a business point of view or was it just their pride getting in the way in order to compete with Intel and increase the perception of being a big company on paper instead of physical output. $5.4 billion is a lot of money to blow and instead of buying out a company that doesn't even have a production chipset close to what Nvidia is offering and graphics processing that now lags behind them, to say nothing about Crossfire, they could've used the money to increase their economies of scale. Intel now has Conroe and what did that do? It's made AMD cut prices by a HUGE margin on most of their X2 lineup. If that didn't scare AMD into doing that then I don't know what did. Basically, if AMD's manufacturing processes were improved which would lower their costs and increase volume they (AMD) wouldn't have much to worry about today. AMD's architecture is top notch and that will keep Intel on its toes for a long time to come. But noow it seems Intel is taking the "Mhz isn't everything" approach and AMD is flipping on their motto by increasing Mhz on their current architecture. Now there were some here that suggested Nvidia to be more open with Intel since Nvidia's options are starting to shrink. It doesn't seem bad now since Intel will be the performance king when Conroe is released. I doubt that Nvidia will overreact to the situation and cut development of chipsets of AMD procs. There's a lot of money to be made in that area still. But with Intel's huge manufacturing output and now soon-to-be superior processors the prospects of Nvidia becoming a closer partner with Intel and that specific profit potential just went up.

[Ben @ Jul 24th 2006 3:41PM]

I for one have to admit I'm a little disapointed by this news. I think this is an attempt to steal some news away from INtel as their Core 2 Duo is due to start selling soon. I've never been a fan of ATI, and I thought that NVidia was probably the best thing to happen to AMD. I kind of feel like this is going to narrow the options I have for motherboards. It seems like AMD and ATI will all be buddy-buddy, and Intel is probably going to drop ATI support like a rock, so I'll have to go to using Intel chips if I want to go with a better Graphics Card company? (NVidia) That doesn't seem good for the consumer. Yes this allows ATI access to 65nm production for graphics chips (wow that would rock) but as someone mentioned their drivers still need help.

I like building my own computers but right now I feel like I've been kicked by AMD and I feel like I'm being lured over to Intel. (Those C2D specs are hard to ignore) Now if only there were some Nvidia nforce5 mobo's for the C2D and I would be sold.

~Ben

[Nighto @ Jul 24th 2006 3:57PM]

*hoping for better ATI drivers on linux*

[Disco D @ Jul 24th 2006 5:20PM]

It's as if millions of voices suddenly cried out in terror and were suddenly silenced.

[Thomas Goddard @ Jul 24th 2006 5:20PM]

Oh how I feel sorry for anyone that buys an Intel Mac now. Everything was great until the two worst driver developers ATI and AMD combined forces to develop the most broken POS drivers the industry has ever seen.

I love the new Macs but I can just imagine the developers at ATI " if( processor == intel ){ system.BlueScreen; } "

You think that the ATI cards are overheating now? Maybe you can cook an egg on your PC after this merger. YAY!!

[Tsubasa Kato @ Jul 24th 2006 6:50PM]

Goodness. Knew it was coming, but what happen to the competition between nVidia and ATI?

[whiskey @ Jul 24th 2006 7:34PM]

AMD buys ATI??? Talk about ways to get into the apple market.

Could this mean that:
A) Every mac sold would benefit AMD (Profiting from intel sales?)
B) We may be on the way of seeing a 64bit dual core AMD MAC?

[Revrant @ Jul 24th 2006 7:44PM]

Crazy, it actually happened, this is a great example of forward thinking, this *will* hurt ATI and AMD in the short term, but in the long term, it might create a new Monolith of the Tech world, I'm hoping this helps out ATI, who has significant problems getting their cards out(They don't have the factory backing nVidia has), and developer support, something AMD has been able to garner itself, I'm still against integrated solutions, as they damage the gaming industry, but ATI's integrated solutions are Vastly superior to Intel's, so maybe I can budge a bit and give them the benefit of the doubt.

Oh, nVidia is no doubt in the makings of some kind of retaliation, and Intel has already done so, expect more from both parties.

[whiskey @ Jul 25th 2006 12:09AM]

or maybe they plan to integrate ati chipsets to their via integrated motherboards

[SHEiK124 @ Jul 25th 2006 12:22AM]

Ugh, I've been an nVIDIA/AMD guy since 2002, but if this means AMD and ATI are going to start being all buddy buddy, then fvck it, I'm going Intel. I hate ATI with a passion, their motherboard chipsets piss me off, and their graphics drivers suck.

[AMDum @ Sep 6th 2007 6:39AM]

-It should have been AMD/nVidia-

If you want to talk Linux, BSD, Opensolaris,... not just Windows drivers,...then
well, its been over a year now and AMD and ATI look like dumb and dumber.
I've been an AMD lover for years - AMD and nVidia was the best combo on any PC, and I DO mean Gaming! platforms,..., or Linux, or BSD, or Solaris. Those were the freedom of choices I liked.
I just bought my first Q4 INTEL and nVidia 8800 GTS, and I realized I had NEVER bought a new Intel cpu ever(except for some used ones that I passed on over the years).
-and its too bad now, 'cause (future)AMD probably won't be working very well with nVidia anymore :(
So the number "2" (but we were No.1 for a little while) CPU maker bought the No.2 Graphics card maker. -BIG DEAL ! proprietary freekin' ATI with their proprietary drivers for Windows only. well, they better change now.
Just because you own Ford doesn't mean you know anything about Engines now does it?

If AMD wanted a Graphics chip-maker why didn't they atleast merge with the best one -NVIDIA !

-It should have been AMD/nVidia-

[Joe @ Jul 25th 2006 8:40AM]

With our powers combined, we form ... DAAMIT!

[Racekarl @ Jul 25th 2006 9:00AM]

To #1:

"Boughten?"

Anyway, you wouldn't need to look at a stock board to see which company's stock price would go up. 99.99% of the time the target of the acquisition sees a rise in their stock price (because presumably the purchaser is offering a price above the current market value) while the purchaser sees a decline in stock price (since they have to offer above market value to get the other sharholders to tender their shares, they are by definition overpaying).

[whiskey @ Jul 26th 2006 11:53PM]

Intel won't renew it's licences with ATI... So it's either AMD Macs, or Mac's with Nvidia

[anon @ Aug 4th 2007 3:15PM]

Do you hear that ATI? All of your drivers suck make better ones!