Report: AMD close to buying ATI

Microprocessor manufacturer supposedly close to $5.5 billion deal for graphics card maker.

As much as analysts aren't always right, they aren't always wrong, either. In May, RBC Capital Markets analysts said microprocessor manufacturer AMD was considering an acquisition of graphics-card maker ATI Technologies.

Today, Reuters is reporting that AMD is close to a deal that would see it acquire ATI for $5.5 billion, citing "a source familiar with the situation" for the info. The source said a deal could be announced as soon as Monday.

In suggesting the purchase in May, the RBC analysts noted that the idea of Intel or AMD purchasing a graphics-chip maker has been batted around for a while, and pointed out AMD's stated intent to increase its capacity in the coming years. As for ATI being chosen for acquisition instead of a rival company like Nvidia, the pair called ATI "a rare buy in the semiconductor space right now."

ATI stock has lost almost 5 percent of its value since the end of May, but shares closed up more than 5 percent today to close at $16.56. Meanwhile, AMD has been taking a beating of late, losing more than 40 percent of its share value since May. Today alone, the stock dropped almost 16 percent to close at $18.26, and is down further in after-hours trading.

135 Comments

  • terrabreak13

    Posted Jul 24, 2006 9:14 am PT

    Does AMD make integrated video cards like Intel? If they do this is great for people purchasing AMD machines. Imagine getting an integrated ATI videocard right out the box. Of course gamers don't use integrated cards but it's great for the average consumer.

  • nikeportugal

    Posted Jul 24, 2006 7:12 am PT

    I already own the stock.. ahaha.. there is nothing like checking your stock and seeing 18% in green

  • dryden555

    Posted Jul 24, 2006 6:53 am PT

    Both ATI and AMD offer great hardware at lower costs but both suffer from irksome compatibility issues everytime a new chipset comes out. Stick with Intel and nVidia chips, less trouble, and pay a little more.

  • Spartan1017

    Posted Jul 24, 2006 6:46 am PT

    it's done?
    cool.
    i look forward to the kind of multicore stuff they will pull off.

  • skitzocyko

    Posted Jul 24, 2006 6:42 am PT

    Even better MBs coming soon!!

  • danmp18

    Posted Jul 24, 2006 6:25 am PT

    This is a pretty massive deal. This would make AMD a pretty big player in the PC world, up there with MS, Dell, Apple, Yahoo, Google, and Intel.

  • wingchunstudent

    Posted Jul 24, 2006 6:06 am PT

    Buy Stock Now! ATI trades under ATYT.

  • Formula_50

    Posted Jul 24, 2006 5:27 am PT

    Update to moderators: The deal is now final. Reported on ABC news.

  • ChaotikZero1

    Posted Jul 23, 2006 8:02 pm PT

    blah blah blah, stop debating about whos better. their all better in some certain areas.

  • bacomonk

    Posted Jul 23, 2006 2:09 pm PT

    I hope we still get AMD-nVidia mobos :s

    I think they should be buying RAM companies... not graphics.

  • rahl247

    Posted Jul 23, 2006 1:38 pm PT

    this is kinda funny i have alway bought intel cpus and never had a problem i have bought ati and nvidias and never had a problem. I just built a new pc with an athlon 64 cpu with a nvidia card and have no problem guys u all know u need to upgrade everythen from nic to video drivers to have optimal performance.
    All u sayen amd is a better for gamen i see no difference at all, they all gave me the same old problems need to update drivers. As far as u all sayen amd has over heaten problem i play wow on my amd pc for 12 hrs strait no problem at all as long as u have a good cpu fan and a case fan u r fine . make sure u use a high power PS so u have plenty of power.
    this merger is good for amd cause now they can make the cpu and video chips work better along with eachother .As far as i can see nvidia and ati have good video cards and they have their own share of problems with certain games but never between a cpu and video card. A cpu chip does not stop worken cause u usen a certain video card reinsert the vid card check and make sure u have enough power for the pc.update every MB drivers and vid drivers.
    But i never seen a pc have problems between cpu and vid card that can not be fixed with updaten the drivers. If there is still a problem then its a hardware problem not anythen else thentry to replace the fan ,cpu or video mabe more then 1 ,then u will not have the the problem that u think is between cpu and vid card.

  • grenadexjumpr

    Posted Jul 23, 2006 1:36 pm PT

    I just think a merging of these two companies could hurt Nvidia or Intel. The merger won't destroy either, but it would certainly hurt them in some way.

    I'm not much of a PC gamer but I know my new computer runs on an AMD processor and uses an ATI graphics card. And I have had zero problems with either so both of these quality companies coming together would probably boost sales of computers.

    Also, this may introduce more laptops and whatnot coming out with a good ATI card already put in.

  • gertish

    Posted Jul 23, 2006 12:17 pm PT

    Either this could go very well for AMD...or this could be the end!

  • GFofgaming

    Posted Jul 23, 2006 12:04 pm PT

    I hope ATI remains an individual graphics manufacturer. IT will just make the AMD's graphics department less competitive.

  • dark_enigma

    Posted Jul 23, 2006 10:39 am PT

    clearing up some issues:

    AMD CAN'T BUY NVIDIA PERIOD.
    From what i read, nvidia is worth around 6 billion, a billion short of the supposed "5 billion" amount. Whilst ATI is around 1.3 billion which is just about right. So it's really impossible now for AMD to buy ouy Nvidia. Also since AMD didn't gain much profit this Q2 2006, and with Intel just releasing now competitive desktop processors doesn't help the situation (yes it doesn't help since the price cuts would definetely reduce profit, even if there's a ton of them sold).

    AMD BETTER THAN INTEL OR INTEL BETTER THAN AMD
    Oh hell, the undying debate. Well the general thing that i saw before was that Athlon64's were for gaming while P4's were for office and production work. With the new Core 2's and X2's it's now just actually the limit of your wallet. For programmability i think intel is good, never had an experience with an AMD before. Though intel usually has newer instruction sets that could speed up processes.

    AMD OR INTEL PROCESSOR IS UNSTABLE
    Now this is simply a stupid statement. The problem with most of the people that have stated this is your typical computer user that can't assemble the whole thing by him/herself. There are a lot of factors, such as, are the parts installed correctly (heatsink and all), are all of the parts working (especially check RAM), are all the parts compatible, etc.. You simply can't generalize that a processor is unstable or what not, it's simply stupid, check out everything before complaining.

    ATI or NVIDIA CARDS AND DRIVERS ARE BETTER
    Another stupid debate. Generally both card makers are good and both also have their own problems. In some games, the game may run good on one and have problems on the other brand, or the other way around. Don't expect that all games run perfectly on your card, because as of now there is no actual unified way of addressing the video card, (though wait till vista) so until that day comes, shut up about one being buggier than the other. As for SPEED, generally now the two are neck and neck and keep on releasing super fast cards that most can't buy. In the mainstream though, their cards are around 1-2 fps apart. As card makers keep on releasing modified versions to accomodate more kinds of people and wallets. Though being an NVidia fanboy i think the best ever mainstream cards were: GeForce 2 MX400, GeForce MX 440, GeForce 4 TI 4200 and the GeForce 6600 (still deciding on the 7 series since I haven't seen sales figures for such), though you can argue with me about this but the sales figures tells all.

    THE IDEA OF THIS MERGER
    ..... What can I say, well maybe it would help AMD become the gamer's CPU now and forever. Since if this were to come true, it would help AMD and ATI make their products work better and faster. Though I don't know what will be the effects of such a thing for other companies. Though NVidia will surely live long for they usually think also about the mainstream consumers of video cards and they have expanded to other market segments faster, such as video processors on cellphones and such. Intel, well it's nearly impossible to slay the giant since it has been known by a lot of people for reliability and longevity (now tell me that there aren't still running pentium 133's and lower).

    Cost of ATI cards, questionable, we won't know what ATI will do with the money that they'll get (If this became true), so we can just hope that the prices drop. Also if this would happen, i think that ATI and AMD would still operate separately like HOW SEAGATE BOUGHT MAXTOR though they still operate separately. (Just wanted to make the thing bold as most people surely don't know this, it happened around a year or two ago . )

    Though i think that this merger would be quite impossible as of now as AMD had plans to RUSH the 65NM fab process and quad core, in order to keep up with intel.

  • nikeportugal

    Posted Jul 23, 2006 10:38 am PT

    I own ATI stock .. muahaha.. I'm laughing all the way to the BANK!!

    I wonder how much they'll be offering for the stock.. I'll go do the math now..

  • JeffreyCor

    Posted Jul 23, 2006 9:49 am PT

    My company makes computers and only AMD based. They provide far more performance and more reliability then Intel. They do not have any sort of overheating problems when a proper CPU cooler is used. ATI have proven very unstable especially in gaming environments. If AMD purchases and greatly modifies the production of ATI they may become useful, similar to how nVidia purchased 3Dfx and made good video cards our of their bad products.

  • hippysnake

    Posted Jul 23, 2006 9:25 am PT

    I've got a 3 PC's,
    1.) Intel pentium 4 3.2ghz with a 512mb Nvidia PCI-E graphics card
    2.)AMD athlon 64 dual core 4200 with 512mb Nvidia PCI-E graphics card (same as above)
    3.)AMD sempron Dual core with 256mb ATI Radeon card.

    Being 100% honest, AMD's athlon handles Nvidia's 512mb card alot better than Intel, theres a huge difference in frame rates, but INTEL IS ALOT MORE STABLE, and AMD's athlon is prone to overheating.
    My AMD sempron machine handles the ATI card, as a fatboy would with chocolate cake. Its absolutely rubbish, you need about 100 drivers to play 1 game that crashes evrery other minute. Plus, I make my own games using the C/C++ languages and AMD's processors have huge difficulty running them, whereas INTEL is much better at it.
    The only language that AMD's processor can decrypt easily is Visual Basic.

  • Sonicgod

    Posted Jul 23, 2006 8:51 am PT

    There new name will be AMDATI! Best name ever.

  • jeb800e

    Posted Jul 23, 2006 8:41 am PT

    I hope that ATI will still make cards and chips for Intel processors still.

  • NestyBoy55

    Posted Jul 23, 2006 7:45 am PT

    hahahaha AMD is so stupid they should've bought Nvidia. and for the record ATI sucks i dont care how long they have been making gfx cards for. i wud pick my 7800 gtx over any ATI card any day.

  • CaptainCrazy

    Posted Jul 23, 2006 7:36 am PT

    I didn't know AMD could afford ATI and I dont' see how such a huge buyout could really benefit them unless they are admitting that their core business is so weak that they need to move into the video card market. Personally I really love the great performance for a lower price AMD processors. Never had problems with them and I have had Intel's before as well.

  • hittin

    Posted Jul 23, 2006 7:32 am PT

    AMD is fantastic.

  • shamarke

    Posted Jul 23, 2006 6:54 am PT

    sarjilguy youre wrong AMD doesnt sucks its better with gaming then intel...

  • mamad_raiss

    Posted Jul 23, 2006 4:14 am PT

    why some people try to hype nVidia and AMD ? there are nothing special , when I was child I had a x386 pc with intel processor , I always upgraded my computer with ati G-cards since radeon 7000 - X1900 and intel CPUs since x386 - p4 3.0 Ghz duo LGA , and I always satisfied with the performance and quality ,
    however I tried AMD cpu and a 6200 geforce graphics card once , my computer automaticly crashed many times and after a while I realized that the problem is cpu and I tried to play HL2 ( I played it on radeon 7500 ) but I couldn't because of a simple driver , I downloaded many drivers but it didn't work .
    so I never again buy any AMD cpu or nVidia graphic card and I hope intel buy ati.

  • sarjilguy

    Posted Jul 23, 2006 4:13 am PT

    [This message was deleted at the request of a moderator or administrator]

  • mpeg3s

    Posted Jul 23, 2006 4:00 am PT

    I'm for the merger if there is a discount to buy both ATI and AMD.

    If they plan to keep the pricing to where it is now, then don't buy ATI.

    Mpeg3s

  • gamespotr0cks

    Posted Jul 23, 2006 1:45 am PT

    Doesn't matter to me much. All I care about is keeping Intel from a monopoly. There's a good reason why Micro$oft + Intel is referred to as the WINTEL empire.

  • Ponsardin

    Posted Jul 23, 2006 1:37 am PT

    I'm so sick of this situation. I hate what it happens nowadays with anyone who wants to beat AMD. I hate this and I want to buy a Mac to get rid of this annoying world.

  • MrPuzzlez

    Posted Jul 23, 2006 12:19 am PT

    Geez, I REALLY need to keep up with AMD...

  • nappan

    Posted Jul 22, 2006 10:38 pm PT

    Oh man what a bummer. I personally think AMD is the best gaming chip maker now, and as much as I used to LOVE ATI, Nvidia is the leader in terms of gfx cards (please, it's my opinion, don't toss a molotov cocktail at me for stating it). I can't help but wish that if this kind of consolidation were to occur, that it would Nvidia AMD was buying, not ATI. That aside, I cannot even imagine the positive and negative ramifications of a move this big. I can't help but have some really forboding feelings though.

  • LouieV13

    Posted Jul 22, 2006 9:38 pm PT

    I hope they make a Cardcesser. ( A video CARD and a proCESSER. LOL ! ) Or a Processer Card!! LOL LOL

    That was funny! LAUGH!!!

    EDIT: By the way i want to piss off ATi fanboys reel quick

    Geforce 7600 > ATi X1900

    HAHAHAHA!!!!

  • chickenoverlord

    Posted Jul 22, 2006 8:54 pm PT

    I think this could be damaging to the industry... and to ATI with the way things are going at the moment!
    We need a more open, competitive market...

    Oh well... whatever, give me a Core 2 Extreme and 2 7950 gx2s any day!!!

  • thepeter

    Posted Jul 22, 2006 8:15 pm PT

    This could greatly affect the PC games market if there would be good GPU's in every AMD/ATI computer.
    At GDC there was a guy saying how intel is effing up the PC games world with their craptacular integrated GPU's.
    So intel could also make better GPU's because of healthy competition.
    This could be great for us consumers... i hope.

  • fissure_ocarina

    Posted Jul 22, 2006 8:00 pm PT

    It dosen't really matter who went with who, the good thing is that the other two companies will have more competition and will try to make cheaper, better things faster, which is great. That's until the other two companies stick together, then there's not much of a difference from what's currently going on.

  • comthitnuong

    Posted Jul 22, 2006 7:26 pm PT

    so does this mean like ati will stop amking cards?

  • valgear

    Posted Jul 22, 2006 7:22 pm PT

    AMD should buy nVidea, AMD>Intel, nVidea>ATI

  • Jab_Jackal

    Posted Jul 22, 2006 6:24 pm PT

    Would be cool if they used their combined technologies to create some better products, but its just a simple buy out, now pay tribute to your new masters deal.

  • rollracer

    Posted Jul 22, 2006 5:52 pm PT

    Personally, for me, the difference between nVidia and ATI is like Pepsi and Coke.

    Also, I don't think this is going to make much of a difference at all for a long time, except maybe cheaper barebone bundles. Big whoop.

    Either way, I like Pepsi

  • ZeTecThreaT

    Posted Jul 22, 2006 5:40 pm PT

    I dont want this to happen.I love ATI and I stand by Intel.Choice is good and at the time I dont care for Nvidia.I hope this deal fails.I dont plan on building a AMD system anytime soon.

  • metaridley101

    Posted Jul 22, 2006 5:36 pm PT

    ATI has been the world's leading GPU company for quite some time now (I wonder why?). I have owned plenty of both cards (GeForce MX440, GeForce 5600, Radeon 9700 Pro, Radeon X850XT, Radeon X1600 AGP, just to name a few) and I beleive ATI will always have a clear advantage over Nvidia. Not because I'm a fan boy, but because they build outstanding cards with outstanding performance and have been doing it without fail for such a long time. Ask people what kind of card they have in their company computer, ask graphic designers what they have in their PC's. I personally do not like AMD because their CPU's are so hard to program with. (Intel programs work great with PSX2, OSX86, and a whole load of other emulators) I think ATI and Intel would be a better combination, for gaming and for working.

  • Matt_Tacular

    Posted Jul 22, 2006 5:25 pm PT

    I have never had a problem with an AMD processor or an ATI graphics card. And nVidia has nothing on the ATI all in wonder's!

    The truth is, I will use either an AMD, or an Intel, and I would use an nVidia, or an ATI, but if I was building a system, I would use an AMD and I would use an ATI. I've personally had more problems with nVidia drivers than ATI.

  • damnjoo159

    Posted Jul 22, 2006 4:56 pm PT

    "ROFL, AMD has better processors than Intel. It's not sinking."

    apparently someone hasn't read about the core 2 duo processors that are beating out AMD on every front

    it used to be that AMD was the cheaper alternative to Intel; now they want to be serious competitors and no longer have the 'cheaper' processors

    it used to be that AMD did have the better gaming CPUs; now they have nothing

  • fissure_ocarina

    Posted Jul 22, 2006 4:32 pm PT

    "it's upsetting to see ATi jump on a sinking boat"

    ROFL, AMD has better processors than Intel. It's not sinking.

    "I would not trade my BFG GEFORCE 9700 Overclocked Ultra with 512 MB of GDDR3 RAM for any ATI card, ever."

    How did you geta 9700?

  • dfsrre

    Posted Jul 22, 2006 3:38 pm PT

    DON"T DO IT!!!! AMD ATI is the devil, there minipulators, there terible too

  • axia_777

    Posted Jul 22, 2006 2:44 pm PT

    I like AMD and have an X4200 Dual Core 64 bit processor from them. I love it. It has sped up my computer considerably. I will never go back to Intel for lots of reasons.

    But ATI? Nope. I don't like their Drivers. They are unstable and crash often, at least in my experience. NVidia is WAY more stable. I would not trade my BFG GEFORCE 9700 Overclocked Ultra with 512 MB of GDDR3 RAM for any ATI card, ever. Now the NVidia dual ship model with two 9700 GPUs? Now that is super phat. get that with SLI and i would have four GPUs in my system. That would eat any game for breakfast, even FEAR at Max graphics settings.

    I hope that this does not mess up the compatablility between AMD chips and NVidia cards. If that happens, a lot of people will be VERY pissed off at AMD.

  • Ewokfryer451

    Posted Jul 22, 2006 2:21 pm PT

    Uhh....Isn't ATI bigger than AMD? ATI been around alot longer. All well, all the more reason to stick with nVIDIA . AMD + ATI = Bad news for PC gaming

  • Mikeac90

    Posted Jul 22, 2006 2:02 pm PT

    Well I'm not really a fanboy, I've used both cards and I prefer Nvidia cards. However if AMD buys ATI, then they can bundle motherboard/processor/Video card sets and make tons and tons of money off this.

  • jofy

    Posted Jul 22, 2006 1:54 pm PT

    JivexDragon
    Bah! Everyone knows that you're just a nvidia fanboy

  • JivexDragon

    Posted Jul 22, 2006 1:23 pm PT

    Bah! Everyone knows that ATi's "Master/Slave" Crossfire system isn't even close to comparable to NVIDIA's SLI. ATi even admits that their system is flawed and is avidly working on a solution. AMD loves NVIDIA anyway. To explain this, NVIDIA chipsets are much better on AMD-compatible boards than Intel-compatible boards. Meanwhile, ATi Crossfire works using Intel Motherboard Chipsets.

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