AMD buys out ATI to create full service chip company

Deal spells closed integration between Nvidia and Intel as AMD snaps up graphics house for $5.4 bn

AMD has spent $5.4 bn buying graphics specialist and chip manufacturer ATI in a deal signed this weekend.

The new company will combine AMD's PC processor businesses with ATI's capability to manufacture graphics and consumer processors on a large scale. AMD said it expected the first benefits of the deal to be forthcoming by 2007 with significant additions to the bottom line by 2008.

"Bringing these two great companies together will allow us to transcend what we have accomplished as individual businesses and reinvent our industry as the technology leader and partner of choice," said AMD chairman Hector Ruiz.

"We believe AMD and ATI will drive growth and innovation for the entire industry, enabling our partners to create differentiated solutions and empowering our customers to choose what is best for them."

AMD is paying $4.2 bn in cash for the company with the rest of the deal using AMD stock. Job losses are expected to follow AMD's announcement that it intends to cut $75 million in costs by the end of next year.

The deal also gives AMD new clout in the increasingly important graphics market. Many of the improvements in Windows Vista are based around improved graphics and Microsoft welcomed the merger.

"Windows Vista will deliver incredible advances in the user experience as a result of advancements in graphics integration and performance," said Jim Allchin, co-president of Microsoft's Platforms & Services Division.

"We're excited by the potential of what AMD and ATI can deliver together to enhance the Windows Vista experience for our customers even further."

Featured Resources

Shining light on new 'cool' cloud technologies and their drawbacks

IONOS Cloud Up! Summit, Cloud Technology Session with Russell Barley

Watch now

Build mobile and web apps faster

Three proven tips to accelerate modern app development

Free download

Reduce the carbon footprint of IT operations up to 88%

A carbon reduction opportunity

Free Download

Comparing serverless and server-based technologies

Determining the total cost of ownership

Free download

Most Popular

How to move Microsoft's Windows 11 from a hard drive to an SSD
Microsoft Windows

How to move Microsoft's Windows 11 from a hard drive to an SSD

24 Nov 2021
What should you really be asking about your remote access software?

What should you really be asking about your remote access software?

17 Nov 2021
Best MDM solutions 2020
mobile device management (MDM)

Best MDM solutions 2020

12 Nov 2021