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AMD - ATI merger likely says Forbes

P

PurdueRy

Lifer
Link to article

Advanced Micro Devices may be looking to buy graphics company ATI Technologies, a move that would benefit the overall graphics industry, according to RBC Capital Markets.

"The synergies of this seem consistent with the recent announcements by AMD to significantly increase capacity over the next few-years," wrote analyst Apjit Walia in a note to investors Wednesday. "We believe ATI is a rare-buy in the semiconductor space right now given the near-term tie-up dynamics."

Walia based his prediction on recent checks in the PC food chain. RBC has an "outperform" rating and $23 price target on ATI, and no rating on AMD. The firm expects ATI to report fiscal 2007 earnings per share of $1.06.

It has long been discussed that the graphics-companies are likely to be bought by one of the microprocessor companies, according to Walia. However, for AMD-rival Intel (nasdaq: INTC - news - people ), a partnership with a graphics company may not be the best idea.

"This tie-up might make sense for AMD at this juncture but we don't think Intel should pursue tying-up with graphics companies and should instead look at the communications-space," said the analyst.

Walia maintained a "sector perform" rating and $21 price target on Intel, expecting more announcements of Dell (nasdaq: DELL - news - people )-AMD partnerships this year, to Intel's detriment.

"The competitive dynamics of the microprocessor-market seem to be changing permanently, he said. "We believe Intel is still not 'reading-the-writing-on-the-wall' and continues to over-focus on PCs."

Intel has introduced drastic price-cuts for its Celeron, Pentium-4, Pentium-D and Conroe processors, which could make the price-war "quite ugly," in Walia's opinion. Intel does seem to have gained some share-back from AMD with the price cuts, but the impact on margins is negative, the analyst said.

In addition, the overall PC market continues to slow and Intel's June quarter is looking "progressively worse" with revenues down close to 10% and the September quarter tracking below seasonality, according to Walia's checks.

"We turned neutral on Intel couple-of-weeks ago given our view of the risk-reward being balanced given the bad-news out there, but we remain negative on the semi-space," said the analyst. "However, this AMD-ATI tie-up would obviously be a clear-positive for the graphics space."
Click to expand...
 
Good news for ATI stockholders maybe?

I'm not a fan of mergers. More companies the better. I was against the HP/Compaq merger and look where it got the company.
 
Originally posted by: raildogg
Good news for ATI stockholders maybe?

I'm not a fan of mergers. More companies the better. I was against the HP/Compaq merger and look where it got the company.
Click to expand...

Actually, I think HP is doing pretty well ATM.

I think nVidia should be worried about AMD+ATI. If AMD uses ATI to produce chipsets, nVidia would SOL in their AMD chipset business.
 
Both companies make great products. Both are also inept *compared to their direct competitor* at marketing them to the general public.



Originally posted by: Lazy8s
.....so this means maybe ATI cards will be worth buying?
Click to expand...

^^^

Case in point.
 
Originally posted by: GTaudiophile
Originally posted by: raildogg
Good news for ATI stockholders maybe?

I'm not a fan of mergers. More companies the better. I was against the HP/Compaq merger and look where it got the company.
Click to expand...

Actually, I think HP is doing pretty well ATM.

I think nVidia should be worried about AMD+ATI. If AMD uses ATI to produce chipsets, nVidia would SOL in their AMD chipset business.
Click to expand...

It took a new CEO and a whole new approach to fix the problems. HP is still not where they wanted to be when they merged with Compaq. They had lofty goals back then. I can still remember Fiorina and Capelas shaking hands and hugging the day they announced the merger. We know what happened afterwards.
 
Intel is already the number one graphics maker in terms of sales. I doubt they can get away with another monopoly by purchasing either ATI/NVidia.
 
Originally posted by: GTaudiophile
Originally posted by: raildogg
Good news for ATI stockholders maybe?

I'm not a fan of mergers. More companies the better. I was against the HP/Compaq merger and look where it got the company.
Click to expand...

Actually, I think HP is doing pretty well ATM.

I think nVidia should be worried about AMD+ATI. If AMD uses ATI to produce chipsets, nVidia would SOL in their AMD chipset business.
Click to expand...

ATI already produces AMD chipsets.

And if you are implying that AMD would possibly use ATI chipsets as their sole chipset manufacturer..that would be a very dumb move (and it wouldn't happen).
 
Originally posted by: Chunkee
Originally posted by: Lazy8s
.....so this means maybe ATI cards will be worth buying?
Click to expand...

perhaps, if they get those drivers better. wished it was nvidia and amd

jC
Click to expand...

:disgust::disgust::disgust::disgust::disgust:

ATi drivers are much different than they used to be....

they are way better than these nvidia ones now adays...way way better...dont need 500 versions to find the right one
 
Originally posted by: Excelsior
Originally posted by: GTaudiophile
Originally posted by: raildogg
Good news for ATI stockholders maybe?

I'm not a fan of mergers. More companies the better. I was against the HP/Compaq merger and look where it got the company.
Click to expand...

Actually, I think HP is doing pretty well ATM.

I think nVidia should be worried about AMD+ATI. If AMD uses ATI to produce chipsets, nVidia would SOL in their AMD chipset business.
Click to expand...

ATI already produces AMD chipsets.

And if you are implying that AMD would possibly use ATI chipsets as their sole chipset manufacturer..that would be a very dumb move (and it wouldn't happen).
Click to expand...

QFT.

I don't see the benefit of AMD buying ATI, but I do see the massive benefit for ATI being bought by AMD.
 
How do you think this will affect AMD stock? It gave it a boost when the news was announced. What if it goes through?
 
Originally posted by: Excelsior
Originally posted by: GTaudiophile
Originally posted by: raildogg
Good news for ATI stockholders maybe?

I'm not a fan of mergers. More companies the better. I was against the HP/Compaq merger and look where it got the company.
Click to expand...

Actually, I think HP is doing pretty well ATM.

I think nVidia should be worried about AMD+ATI. If AMD uses ATI to produce chipsets, nVidia would SOL in their AMD chipset business.
Click to expand...

ATI already produces AMD chipsets.

And if you are implying that AMD would possibly use ATI chipsets as their sole chipset manufacturer..that would be a very dumb move (and it wouldn't happen).
Click to expand...

ATI does not produce chipsets for AMD, they may provide chipsets for their motherboards. Why would it be a dumb move for AMD to produce their own chipset? This merger would benefit AMD more than ATI. According to Intel, merger is a done deal and will likely close within 2 weeks
 
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