2 min read

AMD acquisition a boon to system builders

Chip maker buys ATI for US$5.4 billion and puts Intel and Nvidia on the defensive

It was rumoured for months, but now it’s official: AMD is buying Canada’s own graphics chipmaker, ATI Technologies. And for the channel, this is welcome news.

This is, in fact, exactly what system builders and OEMs have been asking for. AMD is the second largest supplier of processors in the world – but it can’t compete effectively with Intel, which has been offering a platform-centric approach for years. Intel, for its part, has been providing the channel with a complete CPU and chipset offering with integrated graphics and networking. And, up until this point, AMD hasn’t.

The acquisition of ATI, however, will put AMD on a level playing field with Intel. ATI is a major graphics chipmaker, supplying chipsets to both AMD and Intel. It’s unclear what will happen to its relationship with Intel; AMD claims it won’t cut ATI off from Intel, but it’s hard to see how the relationship could continue in the long-term. AMD also partners with Nvidia Corp., ATI’s rival in the graphics space.

AMD’s goal is to compete more effectively in commercial and mobile computing with a platform-centric approach, and it will likely be able to do this. Its past weakness was its lack of a complete chipset offering, but with the acquisition of ATI, it will be able to bring ATI’s Crossfire Xpress 3200 chipset line to the table – providing quality and features that can actually compete with Intel. ATI, for example, makes graphics chips for digital TVs, handheld devices and gaming systems.

For system builders and OEMs, AMD’s more platform-centric approach will allow them to target the enterprise space more effectively, since AMD will play a more active role in controlling the quality of components available to the channel (something it’s been criticized for not doing well enough in the past).

AMD says the channel will also benefit from better integration of the ATI chipset in its Commercial Stable Image Program (CSIP). The program, which was launched last year, aggregates parts from multiple suppliers into platforms guaranteed to remain stable for 15 months. ATI and Nvidia are both CSIP members. AMD hopes the program will increase its share in the corporate market – and the acquisition should be a boon to CSIP (except, maybe, for Nvidia).

ATI already offers a branded line for system builders, and AMD says it will integrate these partners into its own channel.

The deal is expected to close by the end of the year. If all goes as planned, we’ll have two major players taking a platform-centric approach, and the channel is sure to benefit – both from new technology and increased competition. And really, isn’t it about time?