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Friday, 23 July 2010 11:04

How AMD failed to materialize its ATI dream

Written by Fuad Abazovic
amdati_logo2009

Two out of three goals in four years
AMD acquired ATI back in the summer of 2006 and one of the first announcements was that AMD got ATI for Fusion, chipsets, graphics and platforms, but in early 2007 we had a chance to meet with executive Vice President, Computing Products Group at AMD Mr Mario Rivas who told us the three key goals. Lets me remind you that Mario departed from AMD shortly after this article, here.

He mentioned three goals and it is interesting to take a look at the goals today, three and a half years on, as AMD failed in two out of three so far.

The first point was to get graphics, as AMD cared about graphics and they did a decent job so far, at least in games market. The GPGPU market is almost nonexistent for AMD, but at least they have a desire to try to make some money there. AMD's has also managed to churn out quite impressive IGPs over the past three years, and it's still going from strenght to strenght.

The second point was to profit from DTV, handheld market that was supposed to grow to a 2 billion a year. Well, AMD sold that business to Qualcomm for a lousy $65 million as it could not grow it past $400 million so argument two went down the toilet. Spending $5.6 billion and selling its second most important business units for a $65 millions doesn’t sounds like a good deal, unless someone has made you an offer you cannot refuse. Qualcomm got a lot of multimedia and graphics patents from ATI and can continue to compete.

The third and probably most important reason is called Fusion. It was scheduled for late 2008 or some point of 2009, it got canceled a few times and we expect its first iteration to at least launch in limited numbers with the Ontario 40nm part, which was supposed to take on Intel's Atom.

The real Fusion, Llano is scheduled for 2011, probably the latter half of the year, but we are not sure about the schedule as it tends to shift. So, as you can see $5.6 billion spent to buy ATI was not something that helped AMD improve its performance in the short term, but from 2011 on, it will all make much more sense.

AMD also sold a big chunk of its fabs, all except a 28 percent stake, to Abu Dabi-based investment fund ATIC, the company managed to survive the first four years and become profitable. If only AMD hadn't made such a big mess with K10 and the overblown TLB bug and if only they could beat Intel the in mobile segment, or at least get more competitive, it would truly become a great company.

AMD is getting better, there is no doubt about that, but the company failed to fulfill most of the long term goals of its $5.6 billion acquisition. The costly ATI acquisition was followed by K10 issues and by the time AMD got back on track the economy took a nosedive, at the worst possible time. However, AMD has managed to recover some ground in the desktop market over the past several quarters, thanks to its affordable Phenom II and Athlon II parts. In recent weeks, AMD also scored several significant design wins in the mobile market and it's currently dominating the graphics market with a massive lead over Nvidia.

AMD is getting better, there is no doubt about that, but the company failed to fulfill most of the long term goals of its $5.6 billion acquisition. The costly ATI acquisition was followed by K10 issues and by the time AMD got back on track the economy took a nosedive, at the worst possible time. However, AMD has managed to recover some ground in the desktop market over the past several quarters, thanks to its affordable Phenom II and Athlon II parts. In recent weeks, AMD also scored several significant design wins in the mobile market and it's currently dominating the graphics market with a massive lead over Nvidia.
Last modified on Friday, 23 July 2010 14:35
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