ATI and AMD Seek Approval for Merger? 229
Krugerlive writes "The rumor of an ATI/AMD merger/buyout has been out now for sometime. However, this morning an Inquirer article has said that a merger deal has been struck and that the two companies will seek shareholder approval on Monday of next week. In the market, AMD is down as a result of lackluster earnings announced last evening, and ATI is up about 4% on unusually high volume." This is nothing but a rumour at the moment, a point that C|Net makes in examining the issue. From the article: "AMD has always boasted that it only wants to make processors, leaving networking and chipsets to others. AMD does produce some chipsets, but mostly just to get the market started. Neutrality has helped the company garner strong allies."
Does that mean.... (Score:4, Interesting)
were holding back progress in 3D graphics performance).
Talk about a dumb move (Score:4, Interesting)
The market's view of this is visible from the fact that ATI is up and AMD is waaaay down.
God damn it. (Score:1, Interesting)
GPU in socket? (Score:3, Interesting)
That'd be hella cool.
Tom
Re:Talk about a dumb move (Score:1, Interesting)
The stock market is just a ponzi scheme / elaborate game of hot potato anyway, so don't try to take any deep meaning from stock prices on anything less than a year average.
Dilbert, anyone? (Score:4, Interesting)
Re:completely agree (Score:3, Interesting)
AMD, after buying out ATI opens up the architecture or supports Linux as a 1st tier platform.
I bet if ATI was putting out first rate drivers it might influence quite a few purchases in that direction
Not that far fetched. (Score:5, Interesting)
IMHO, AMD would be well advised to start shipping it's own chipsets, just like Intel. It just makes things easier for their most important customers, the big OEMs. They have one less vendor to worry about. There's less testing required, since presumably AMD would test the CPU and chipset together. And it's less risky for both customers and AMD since AMD has a very strong incentive to make sure that chipsets will be available for their platform on time, whereas third parties have different priorities.
Then there's the whole GPU angle. Why shouldn't GPUs be produced in company owned, i.e. tweaked for performance, fabs? They're every bit as complex and big and expensive as CPUs. Bringing that in house should give a nice bump to performance. And what is a GPU going to be in five years anyway? On the AMD platform, all the tools are in place to allow the GPU to work much more like a cheap DSP/co-processor than we've ever seen before. If the Opteron wasn't an Itanium killer, maybe a couple Opterons and a couple "GPU-DSPs" will do the trick. Even for regular workstations, imagine just plugging a GPU into a free socket on the MB? That would fit very nicely in the middle of the graphics market... way better than integrated, but way cheaper than an add-on card.
Lastly, AMD needs a way to use the last generation fab equipment a little longer. Making chipsets would let them use the fab equipment for an extra few years. They lost that cost efficiency when they spun off the flash business. Fab gear is expensive, so it's kind of a waste for them to be yanking it out everytime the minimum for a marketable CPU moves higher.
Five years ago AMD needed partners and an ecosystem to support their own platform and survive as a company. The next five years are about turning the CPU market into a duopoly.
I have a few shares of AMD. And I'd like to see this deal happen, but only at a decent price (from AMD's point of view). Hmm... this post turned rather long...
Re:Talk about a dumb move (Score:3, Interesting)
The market's view of this is visible from the fact that ATI is up and AMD is waaaay down.
Wrong. The company doing the takeover (AMD) almost always declines -- rather noticably, too -- and the company being taken over almost always increases -- usually because the takeover bid is at a higher stock price.
AMD is just reporting bad earnings news in a volatile, short-heavy, news-sensitive market. With companies reporting good earnings still trading downward, it's no surprise that reporting bad earnings will earn a company a sound beating on its stock (case in point: Dell). Rumors of the AMD bid weren't even reported by Dow Jones until well after today's close. An analyst quoted in the DJ story mentioned that AMD would have to issue more stock (and dilute current shareholders' stock, a Bad Thing) in order to complete the deal, with ATYT valued at $5.6b, both companies with only about $3b of combined cash, and AMD with $500m of debt.
I don't see how this makes any financial sense for AMD. The stock is at 52-week lows, there's disappointing earnings for the most recent quarter, the phasing out of one of their chip lines is confusing consumers, Intel's Conroe seems to have better prospects, and AMD is spending a lot of money for a new plant that won't be ready for years. They don't seem to have any good news.
Re:Depends. (Score:3, Interesting)
What about (I hate that I am going to type this word) synergies. Maybe AMD thinks that they have enough in common with ATI that they could reduce redunancies after the merge (ie fire people and possibly sell off a fab plant) and make both companies more profitable. Just a thought.
100% Going To Happen (Score:4, Interesting)
Good news (Score:3, Interesting)
The AGP slot has been getting faster and faster. The GPU has been getting bigger and has been doing more. There is an obvious need for a physics core and multicore CPUs. Clearly this is leading to adding the GPU to the CPU on the same chip, or at least very close to it, like the L2 cache on the slot1 Intel CPUs. After a certain AGP/PCIX bus speed, the AGP or PCIX slot will become less feasible, and it will be important to put the GPU as close to the CPU as possible.
Now think of the PS3. Its a revolution. Its not here yet, and its release is not being managed very well, but the ball on multicore CPUs (not just dual core) has gotten rolling. The Ultrasparc T1 has shown the world that multicores can be real and actually work. Not to mention the fact that most computers bought today at least has a mediocre GPU somewhere in it. This means AMD needs a GPU to add to its multicore CPUs as another core. They've already added the northbridge to it havent they? And that has saved us money hasnt it?
Intel has one-upped AMD recently with its Core chips, and AMD sounds like its really gonna one-up Intel with chips that should take the market away.
Re:Depends. (Score:3, Interesting)
Not at the moment. But with a little more miniaturisation and time both CPU and GPU will be merged onto the one chip package. This is a situation where the combined company will have more than a small edge over their rivals. Avoiding the use of (relatively) long transmission wires to communicate across the motherboard bus; speeds will increase beyond anything current technology can offer as higher freqencies will be able to be used. It's all about second year electrical engineering, same thing as communication over telephone lines.
Both nVidia and intel will have to merge to keep up, otherwise they will loose out, leaving the merged ATi/AMD entity ahead of the pack all on their own.