ATI Technologies has announced that it would continue selling chipsets for microprocessors by Intel Corp., even though, the graphics and chipset designer is in process of the acquisition by Advanced Micro Devices, the arch-rival of Intel Corp., who holds the license on its processor bus technologies and in some cases may retract them.

“There is no truth to the rumor that Intel has pulled ATI’s chipset license. We continue to ship Intel chipsets under license,” said Philip Eisler, senior vice president and general manager, chipset and notebook business unit at ATI Technologies.

ATI Technologies stressed that despite of the acquisition by ATI, it will continue to produce chipsets, including present and future generations for “as long as customers want them”, including core-logic products for Intel Core 2 and Intel Pentium processors.

Financially, it does make sense for ATI to ship its chipsets for Intel processors, as such chips are found in the vast majority of computers shipped worldwide. According to estimations by Mercury Research, ATI shipped 4.3 million of chipsets featuring Intel’s Quad Pumped Bus in Q1 2006 and also supplied 3.9 million of core-logic sets that support AMD’s HyperTransport bus.

A report from Mercury Research released in late April claims that in the first quarter of 2006 there were 67.3 million core-logic sets shipped. Intel Corp. has maintained its largest market share of 57%, down significantly from the Q1 2005 as a result of its withdrawal from entry-level chipset market, Via Technologies was commanding 15% of the core-logic market, down 1% sequentially and flat annually. ATI Technologies, whose market share was only 3% a year ago, could boast with 12% share in Q1 2006 and become the world’s No.3 chipset provider. Meanwhile both Nvidia Corp. and Silicon Integrated Systems supplied less chipsets than in the prior quarter and had 9% and 6% market share, according to the report.

AMD plans to 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. The transaction is valued at approximately $5.4 billion.