AMD acquisition of ATI puts pressure on Intel

Stan Beer
Monday, 24 July 2006 18:28

Your IT - Home IT

Chip maker AMD has moved beyond the PC market into the graphics and mobile telephony chipsets space, with the announcement of a US$5.4 billion acquisition of Canadian graphics chip specialist ATI.

Analysts are already saying that the combination of AMD processor products and ATI's chipset and graphics chip range will help AMD in its quest to eat into rival Intel's dominant market share.

The ATI acquisition, comprised of a combination of cash and shares, will enable AMD to compete head to head with Intel in new product areas, where the potential for growth is higher.

As the sales of PC processor chips slows, both AMD and Intel will be looking for areas outside the PC market, such as consumer electronics, gaming and mobile telephony to bolster sales. ATI is particularly strong in the consumer electronics and mobile telephony space.