ATI seeks to expand Microsoft partnership
Wed June 1, 2005 2:45 AM GMT-04:00
By Michael Kramer
TAIPEI (Reuters) - ATI Technologies Inc. is seeking to expand cooperations with Microsoft Corp. after supplying the graphics chip for the next generation of its Xbox game console, said the Canadian firm's CEO on Wednesday.
"Our view is that when we enter a partnership like Xbox with Microsoft, it's not a one-shot. It's really a launch on a long-term partnership," ATI Chief Executive Dave Orton told Reuters in Taipei.
"So the opportunity is to do much more together in a range of devices, and that's what we want to do because we believe this technology is ultimately redeployable in different forms," Orton said in an interview on the sidelines of a technology seminar.
"That's what we hope ultimately Microsoft will decide," said the executive from the Markham, Ontario-based company.
Microsoft unveiled its second-generation console in May, the Xbox 360, saying it would hit store shelves in time for the 2005 holiday shopping season.
ATI has said it expects XBox 360 royalties to be similar to its deal with Nintendo's GameCube console, in a range between US$2-US$5 per console.
Orton said personal computer graphics chips, which account for 85 percent of revenue, will still be ATI's foundation in the next several years but that would be well balanced by its cellphone graphics and digital television businesses.
"When you just look at what's going to happen in the digital TV market and the cellphone market, and ATI's position in those markets, and the investment we're making, we expect to see high double-digit growth -- 50, 70, 80 percent kind of growth rates, not just for the market itself but ATI's growth rates in those markets," he said.
"So when you do the math over the next three to four years, you're going to balance. The company starts to look much more like a PC/digital consumer company, not a PC company that's dabbling in digital consumer," Orton said.
ATI's archrival, NVidia Corp., supplied the graphics chip for the current Xbox console, but had a high-profile dispute with Microsoft over the price paid for the chips and the volume in which they were produced. The two firms settled the dispute.
NVida will power the graphics in Sony Corp's Playstation 3, the next-generation console to be launched next year.
Production of ATI's graphics chip for the Xbox 360 will be outsourced to top contract microchip maker Taiwan Semiconductor Manufacturing Co. , which also makes much of ATI's other products.
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