When a rumor is launched, everyone starts making all kind of calculations and suppositions about it. But what about AMD buying ATI?
Dell using AMD processors into their servers were rumors, but in the end the rumor came true. Could this AMD buying ATI rumor be also true?
One analyst from Forbes, Apjit Walia, believes that “AMD-ATI Merger Looks Likely.”
“The synergies of this seem consistent with the recent announcements by AMD to significantly increase capacity over the next few-years. We believe ATI is a rare-buy in the semiconductor space right now given the near-term tie-up dynamics,” said analyst Apjit Walia.
AMD and ATI are working together in the chipset market with ATI providing integrated chips for both desktop and notebook market. Their latest Radeon Xpress 1100 and 1150 are DX9 compatible and are perfect for AM2 processors. And since ATI is quite present on the notebook market, you might find an ATI chipset in every AMD based notebook.
The things are quite the opposite on the desktop market where NVIDIA is holding the majority of the market.
But wouldn’t a acquisition between AMD and NVIDIA or ATI will be an unfair and anti-trust against Intel who is producing both processors and chipsets. And let’s not forget that Intel is having a deal wth ATI and both are producing top quality Intel motherboards and I’m sure that Intel wouldn’t want ATI to go to AMD.
Considering all this, why is a AMD-ATI merge profitable?
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, a partnership with a graphics company may not be the best idea. – Forbes
What will become of this rumor we will see and we will surely keep you posted. Any comments are appreciated.