X-bit labs

ATI Set to Acquire XGI Technologies – Claim [UPDATED 2].

Category: Video

by Anton Shilov

[ 03/02/2006 | 05:37 AM ]

UPDATE: Adding background information.

UPDATE 2: ATI Technologies officials decline to comment.

ATI Technologies, a major supplier of graphics and multimedia processors for personal computers and multimedia applications who recently announced plans to accelerate its acquisitions, may be targeting to buy a minor player of the graphics chip market, XGI Technologies.

Chinese-language web-site HardSpell has reported that ATI will shortly announce acquisition of XGI, a Taiwan-based graphics chip designer, which was a spin-off from Silicon Integrated Systems originally. The web-site claims that the acquisition is to be announced Friday, the 3^rd of March. Some other unofficial reports also claim about the intention of ATI to take over XGI.

This is not the first time when ATI is rumoured to acquire XGI. Back in 2004 such information was denied by both companies and the acquisition was proclaimed to be unreasonable by analysts. Moreover, the acquisition of XGI would not be consistent with the take over strategy of ATI, who has been acquiring companies in the consumer electronics fields in the recent years.

In 2004 the price that ATI would pay for XGI was $75 million, but since then XGI has not launched any products competitive in the mass market, though, has managed to release several chips that were adopted in several niche markets.

Recently Nvidia Corp., ATI’s arch-rival, acquired Uli Electronics, a struggling chipset designer from Taiwan to boost its presence in Asia and get some valuable technologies. A reason for ATI to take over XGI could be similar.

ATI Technologies director of public relations Chris Evenden declined to comment on the acquisition of XGI. He said ATI was "not commenting on such rumours".

XGI Technologies could not be reached for comment.