Intel’s No. 1 rival Advanced Micro Devices plans to buy the Canadian graphics chip maker ATI Technologies for $5.4 billion, mostly in cash.
The two boards have agreed on the deal, which they say will establish a new chip powerhouse with 14,900 employees and likely revenue of more than
$7 billion a year.
Separately, AMD has also slashed the prices of a number of its PC chips. The Wall Street Journal says the AMD-ATI marriage will shift the balance of power in the chip industry. AMD’s product portfolio is limited to PC and server microprocessors but ATI will give it a rounded package of products.
ATI, which makes chipsets and graphics chips for PCs, also manufactures semiconductors for consumer products, such high-definition TVs and mobile phones.
The deal will step up pressure on Nvidia, the other dominant maker of graphics chips, which so far has allied with AMD to compete with Intel.