Originally posted by: Ulfhednar
Pecisely. I don't understand why people are peeing themselves with excitement and preaching "the death of ATI" when AMD themselves has said that ATI is going nowhere, Radeon is going nowhere, but both companies now have the combined experience of two very successful microprocessor designers and the resources of both to boot.
Well of course they
said that. There was never any possibility that they wouldn't
say that, regardless of whether it is actually true or not! If they'd said anything else, ATI's current product line would have gone into instant meltdown, which would have made the AMD share price collapse, triggering a class-action lawsuit by AMD shareholders! The default line in
any business announcement is
always "everything is fine, don't worry". That doesn't mean you should believe it.
What you need to ask is: why was AMD interested in acquiring ATI? Was it because AMD wanted to get into the high-end graphics card market? The answer to that is emphatically "no". AMD isn't interested in video cards. They are
very interested in selling more CPUs, however, and, in particular, they're interested in competing with Intel.
Compared to Intel, AMD has, up to now, been lacking two very important things: 1) the ability to turn out top-notch motherboard chipsets for their own CPUs; 2) the ability to produce reasonably good and
cheap graphics chips for use in integrated-graphics systems.
Think back a few months before the merger. Do you remember an announcement from AMD saying that they were basically no longer interested in competing in the high-end consumer PC market, but were instead going to focus much more on corporate PCs? Their chances of doing that are looking quite good, what with the benefits of Opteron in multi-processor machines. Who would ever have guessed that Dell would start shipping AMD systems?
But to achieve the gains in the corporate market that AMD is looking for, they have to be able to compete on a more even footing with Intel, and that means they need motherboard chipsets, and they need integrated graphics. The reason they acquired ATI is that it was the simplest way to acquire both of those things. There are other benefits too: AMD/ATI is now beautifully positioned to produce a genuine "system on a chip" product - CPU and GPU on the same die. This (or any interim graphics chip based on Torrenza) cannot ever be a high-performance device because of the lack of high-speed dedicated video memory - but in price/performance terms it could be a killer. Not because it's fast - because it's cheap.
The high-end video card business, on the other hand, is a market AMD has no interest in. If the ATI high-end line had been highly profitable over the past few years then of course AMD would keep it going - they'd be idiots not to. But that's the problem: it
hasn't been highly profitable over the past few years. And I really can't see AMD pouring vast resources and expertise into trying to improve an essentially unprofitable market segment that they have no direct interest in. They'll want to make as much as they can out of the products ATI already has, or is just about to have - again, they'd be dumb not to. But, when it comes to developing new, high-end ATI products, I just can't see why AMD would bother. ATI in isolation would have no choice but to go ahead with them, but I can't see the appeal to AMD.