This news hit me like a ton of bricks — is this even remotely possible? According to this article at Forbes.com, AMD (yes the processor designer) might be looking into buying ATI (yes the graphics company). According to the article it would be a move that would “benefit the overall graphics industry,” though I don’t immediately see how.
Another quote in the article that is suspect is this:
“The synergies of this seem consistent with the recent announcements by AMD to significantly increase capacity over the next few-years,” wrote analyst Apjit Walia in a note to investors Wednesday. “We believe ATI is a rare-buy in the semiconductor space right now given the near-term tie-up dynamics.”
First, I don’t see how buying ATI would allow AMD to increase their capacity at all since ATI is a fab-less semiconducter design company. ATI has good engineers and technology leaders, as their line of GPUs shows, but I don’t see how this merger would benefit AMD much at all.
If anything, an AMD-NVIDIA merger makes more sense as NVIDIA chipsets are the better of the AMD market place for the desktop segment. ATI does have an advantage in the mobile chipset department, but NVIDIA seems to have stronger technology coming up the pipeline.
Anything is possible I guess, but I don’t this one panning out at all. I am curious to see what you all think of this, so I have started a thread in our forums to discuss.
Advanced Micro Devices may be looking to buy graphics company ATI Technologies, a move that would benefit the overall graphics industry, according to RBC Capital Markets.
“The synergies of this seem consistent with the recent announcements by AMD to significantly increase capacity over the next few-years,” wrote analyst Apjit Walia in a note to investors Wednesday. “We believe ATI is a rare-buy in the semiconductor space right now given the near-term tie-up dynamics.”
Walia based his prediction on recent checks in the PC food chain. RBC has an “outperform” rating and $23 price target on ATI, and no rating on AMD. The firm expects ATI to report fiscal 2007 earnings per share of $1.06.
It has long been discussed that the graphics-companies are likely to be bought by one of the microprocessor companies, according to Walia. However, for AMD-rival Intel (nasdaq: INTC – news – people ), a partnership with a graphics company may not be the best idea.
