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AMD spins off Radeon graphics into new division

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AMD has formed a new Radeon graphics division and put its highly-regarded CTO, Raja Koduri, in charge. The Radeon Technologies Group will run quasi-independently of AMD with the goal of recapturing market share from NDVIDIA and "staking leadership positions in new markets such as virtual and augmented reality," according to CEO Dr. Lisa Su. Koduri is a key figure in the graphics industry who developed the first DirectX 9 graphics cards. He later helped Apple build its Retina program during a tenure as graphics CTO before returning to AMD in 2013.

When AMD bought ATI for $5.4 billion in 2006, its aim was to develop all-in-one "APU" chips that do both graphics and CPU chores. That worked out well in some ways, as both the Xbox One and Playstation 4 consoles use custom versions of its 64-bit APUs. However, AMD's processors and graphics cards haven't fared well against its main rivals, Intel and NVIDIA, and sales have dropped precipitously since it bought ATI.

So why the split? Under Koduri's leadership, the company wants Radeon to flourish on its own as a "more agile, vertically-integrated graphics organization," as Su put it. New technologies like 4K and virtual reality demand the latest graphics technology, and "AMD is one of the few companies with the engineering talent and IP to make emerging immersive computing opportunities a reality," said Koduri. On the other hand, VR and immersive tech is brand new, so nobody's making any money from it yet.

It's possible that AMD is priming its Radeon division for a sale, though it's also rumored to be getting a private equity cash injection. Either way, the company needs to turn things around quickly -- despite the console success, its market share in both discreet and graphics card sales has tumbled. If anyone can turn things around, it's Koduri, but he certainly has his work cut out for him.

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