ATI Technologies is expected to acquire research and development teams at XGI, not the whole company, according to a report from the media in China. Such kind of acquisition is expected to allow the company to get some additional engineering talent and not expand other teams within the company, however, it is unclear whether the company gets already developed products and patents.

ATI is expected to pay $3.5 – 4 million U.S. to acquire research and development (R&D) departments of XGI Technology in China and the U.S., claims HardSpell web-site. The acquisition does not involve other parts of the company, which means that XGI is likely to remain on the market. It is not completely clear, how can a technology company may survive on the market without R&D operations. However, XGI itself said that it plans to withdraw from the market of desktop graphics. 

“XGI has decided to move the main focus of the company into embedded and server market. The detail of this will be announced once everything gets clear,” said CP Lin, a spokesman for XGI late last week.

Some industry sources think there are a number of world-class specialists in XGI from overseas, but what is pretty obvious, the quantity of such engineers is not sufficient to shape a large design team for PC graphics processors. Still, for ATI or Nvidia it may make sense to get those specialists onboard to broaden the presence on the tactically vital Asian market.

XGI Technology is a spin-off from Silicon Integrated Systems Corp. that acquired graphics division of Trident Microsystems in 2003. The company has intended to challenge ATI Technologies and Nvidia Corp. in all market segments, but the high-end product called XGI Volari Duo V8 Ultra did not demonstrate decent performance, whereas lower-end and mainstream chips were not successful on the market. Still, XGI has some design wins with server makers thanks to its low-power graphics chip.