01:14 AM

Story of the Day: AMD buys GPU maker ATI. What now for Nvidia?

By Richard Koman for SiliconValleyWatcher


AMD made a major push towards parity with Intel today with a $5.4 billion acquisition of ATI Technologies - a major manufacturer of graphics chips, chipsets and the semiconductors used in cellphones and HDTVs. The move, says AMD CEO Hector Ruiz, will enable AMD to offer more integrated platforms by integrating microprocessors with other types of components.

ZDNet's David Berlind has a podcast of the press announcement of the deal, in which Ruiz and ATI pres Dave Orton describe "a future where graphics technologies are integrated into the microprocessor silicon much the same way that AMD already integrates memory controller technology into the same dies as its CPUs."

At The Register, Guy Kewney points out that concerns that AMD paid a premium (as much as 25%) simply miss the point. The world is moving to GPUs - you just can't cram all the processing power required for HDTV and fast-response gaming. Throw in the exploding market for video iPod devices and the convergence of media and voice that is finally happening in cellphones and, Kewney writes:

AMD feels that it has to move, now, before it becomes part of Intel, rather than part of a generic processor platform. If it is right, then the question of "how much did you pay for ATI?" is irrelevant. It may be a question of "How can you expect to survive, without ATI?"


Now Valley wags are turning their attention to Nvidia, the Santa Clara-based graphics chip maker who has been AMD's main supplier of such chips. Does the deal leave Nvidia out in the cold for supplying the NForce Pro chipset to AMD's Opterons? Will Intel now buy Nvidia?