AMD to Buy ATI

AMD to buy ATI for about $5.4 billion is an example of the flood of news reports this morning confirming rumors that Advanced Micro Devices is buying ATI Technologies. The About AMD & ATI Page on the ATI Website (thanks Mike Martinez) has a preliminary outline of where this will lead, and here's the announcement:
NEW YORK (Reuters) - Advanced Micro Devices Inc (NYSE:AMD - news), the No. 2 supplier of computer processors, said on Monday it would acquire graphics chip maker ATI Technologies Inc. for $5.4 billion in cash and stock to expand its product mix and grow market share as it battles Intel Corp. (Nasdaq:INTC - news).

Under terms of the deal, AMD will acquire all of the outstanding common shares of ATI (Nasdaq:ATYT - news) (Toronto:ATY.TO - news) for $4.2 billion in cash and 57 million shares of AMD common stock, based on the number of shares of ATI common stock outstanding on July 21.

AMD said it would pay $20.47 for each ATI share. That marks a 24 percent premium over ATI's closing stock price of $16.56 on Nasdaq on Friday. The stock added another 7 percent to $17.68 in after-hours trading amid media reports of the expected deal.

The consideration for each outstanding share of ATI comprises $16.40 in cash and 0.2229 shares of AMD common stock, the companies said.

AMD, the No. 2 supplier of computer processors, said it expects to finance the cash portion of the transaction with a combination of cash and new debt.

AMD has obtained a $2.5 billion term loan commitment from Morgan Stanley Senior Funding which, together with combined existing cash, cash equivalents, and short-term investment balances of about $3 billion, provides full funding for deal, it said.

ATI said it has agreed to a termination fee of $162 million. The deal is subject to the approval of ATI shareholders and regulators in the United States and Canada.
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No subject
Jul 24, 2006, 18:09
Dev
54.
No subject Jul 24, 2006, 18:09
Jul 24, 2006, 18:09
Dev
 
The GPU isn't going to be integrated into CPU for a very long time (way more than 3-5 years).

Aside from cost (most computers sold have integrated video in chipset, because the businesses and people buying an average computer arne't interested in paying more for a separate video card), there's other reasons.

The huge increase of transistors is a great point (modern GPUs have more transistors than modern CPUs).

The massive mismatch in core running speeds is another good point someone brought up.

There's also memory. Modern graphics cards are often bottlenecked by the memory bandwidth and access times. System ram is FAR FAR slower than graphics ram.

The people willing to pay the extra cost for this (and it will NOT be cheap) would be gamers. And guess what... gamers aren't going to want to accept a 50% reduction in game performance so it will work with system memory.

And the rest of the world isn't going to pay 5x the system memory price to equip entire systems with the current high speed memory in graphics cards (generally 2 or 3 gens ahead of system memory).

So I'm sorry, but your opinion of GPU's joining into CPU's just wont happen in a very long time until many of the above reasons have changed, way more than 3-5 years.

I can see integrated video (into chipset, not CPU) becoming more common among the low end computers, but it already is VERY common. In fact, I belive that ATI makes more money from integrated stuff than they do from thier retail graphics cards. Simply because of the sheer numbers they sell.

My 2 cents

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