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The acquisition of ATI Technologies by Advanced Micro Devices obviously would obviously catalyze roadmap changes for both companies, however, at this point no one can tell how exactly plans of the companies are going to change. An analyst from American Technology Research believes that eventually “the new AMD” would scrap the discrete graphics chips business.

“After analysis of the options, we believe AMD could divest the discrete GPU business and still achieve the company’s longer term goal to integrate a CPU and GPU onto a single silicon chip,” said Doug Freedman of American Technology Research in a note to clients.

The analyst believes that the market share for ATI Radeon discrete graphics processing units (GPUs) will be limited to the market share of AMD’s own microprocessors, thus, will not be really large.

“The discrete GPU business working from within AMD will be at a disadvantage to Nvidia and other independent GPU suppliers. ‘AMD’ GPUs will be very closely tied to AMD platforms and limited in the amount of traction they will be able to gain on Intel-based systems,” Mr. Freedman claims.

At this point discrete GPU business accounts for 50% of ATI Technologies’ quarter revenue of about $650 million, whereas core-logic sets account for about 26% of the company’s quarterly sales. ATI Technologies uses graphics cores and other technologies it develops for discrete GPUs in its chipsets and other products. By ceasing to develop leading edge graphics processors, the company may find itself significantly behind rivals and lose its advantages it may have over market leader Intel Corp. However, Mr. Freedman believes that ATI will be difficult to push its multi-GPU technology into the marketplace, which will reduce the company’s potential for success.

“This will be a marketing issue more so than a technical issue. However, it is unlikely that Intel or Nvidia will support CrossFire in their chipsets, thereby reducing the total available market (for ATI). While the performance/enthusiast PC market has been a small but lucrative niche, recent acquisitions of boutique PC suppliers by Dell (Alienware) and HP (VoodooPC) will bring this technology to a wider audience. Neither these large OEMs nor the smaller boutiques want to be bound to a single GPU supplier,” Mr. Freedman claims.

Currently ATI’s multi-GPU technology is supported by chipsets from ATI as well as Intel Corp. or Via Technologies, meanwhile Nvidia’s SLI is only supported by Nvidia’s own chipsets. Nevertheless, AMD will cease to develop ATI’s chipsets for Intel’s microprocessors eventually, whereas Nvidia will continue to create core-logic sets for both AMD and Intel chips.

ExtremeTech web-site further quotes Mr. Freedman as saying that AMD can sign technology licenses for its GPU technology, creating a revenue stream. Finally, ditching the standalone business would lower AMD’s revenue by “only” $1.4 billion while increasing its gross margins to over 50%.


Comments currently: 30
Discussion started: 10/29/06 01:53:13 PM
Latest comment: 10/31/06 10:22:08 AM
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This is not cool. I respect ATI's high end gpus's and saw crossfire as a serious threat to sli. Had ATI continued on their path I believe their chipset and mulit gpu soloution would have become the market leader. Their X1900XTX already dominated the single gpu sector in terms of power (not sure about sales) .

With the new R600 ATI would have had an incredibly powerful gpu and had they released RD600 it would have been a great platform to own wether for Intel or AMD.

Now we here that AMD them selves are making ATI do their bidding. It seems the ATI-AMD merger benifts no body except AMD.

AMD wants do an intel by dishing out onboard gpus and weak cpu-gpu technologies which will not be for the high end sector but for the mainstream.

So in the high end all we have left is Nvidia. This is not good for the industry as competition equals faster technolgy refreshs , more advanced technology and better prices. Now Nvidia will be able to relax as they ominate the high end sector.

There will be nothing stopping them from charging what ever they please for the 8800GTX and treat customers how they please.
We will also only ever see new gpu architectures from once a year to every 5 years perhaps if no other company steps up.

I truly hope that ATI tells AMD stuff their ideas and continue building high end gpus and conroe intel chipstes , as without it crossfire becomes crippled in todays climate.
0 0 [Posted by:  | Date: 10/29/06 01:53:13 PM]

I would say "mr" Freedman is talking out of his rear.

Smart thing to do for AMD would be to keep making discrete GPUs AND also to keep making chipsets for Intel, the best they can come up with.
That would make their revenue far less "temperamental" according to the faily common shifts in cpu popularity.
0 0 [Posted by:  | Date: 10/29/06 02:11:16 PM]

Previous posters: This is just what some unrelated guy thinks. No need to take it as gospel. :)
0 0 [Posted by:  | Date: 10/29/06 04:00:17 PM]

I use AMD products because I find them to be of good quality. I have always used ATi because I prefer them since my first PC with stand alone graphics. I really looked forward to the merger in hopes of making both companies better but NOOO, fucking AMD has to fuck it all up with destroying ATI's line of grpahics. Now nVIDIA will dominate and have almost no competition (unless Intel can really do good in stand alone graphics). I am definitely switching to Intel if they do this. Fuck AMD.
0 0 [Posted by:  | Date: 10/29/06 07:08:34 PM]

Intel/Nvidia not supporting Crossfire? It is ATI that does not support nvidia and most intel chipsets for Crossfire. There is no difference between an Intel PCI-E slot and an ATI PCI-E slot as they are both PCI-E compliant.
0 0 [Posted by:  | Date: 10/29/06 09:36:27 PM]

By the way, take a look at overclockers .com comments about this idiot - "Clearly, this guy has a major problem with ATI video cards, and he's not going to let anything like contrary facts or consistency or financial sense stop him. You'd think a rogue Radeon wiped out his family (or at least his gaming clan) once, and he wants revenge."
0 0 [Posted by:  | Date: 10/30/06 11:13:40 AM]

Everyone is freaking out over nothing. Apparently none of you have read AMD/ATI's Strategic Vision Presentation. AMD has always been about advancing technology. Think about all of the things that AMD has started over the last five years, that the mighty Intel said they would never implement, and magically they follow on AMD's coat tails. I will leave you with one comment from the Presentation...

Innovation: Consumer Electronics and Graphics
"Maintain and Extend our leadership in discrete graphics"

That right there is straight from the mouth of AMD and and that sounds to me like The Radeon series will be here for a long time to come! And as far as the AMD/ATI merger, I like the fact that my two favorite companies for graphics and processors are now one!!
0 0 [Posted by:  | Date: 10/30/06 03:50:56 PM]
- collapse thread

It make sense that AMD will not just give up ATI's discrete graphics line just for some worthless integrated graphics. If that was their plan, then they would not have to pay $7 billion for the ATI company.
0 0 [Posted by:  | Date: 10/30/06 07:09:12 PM]


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