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AMD/ATI merger July 25, 2006

Posted by j-dub in Technology.

Advanced Micro Devices (AMD) is going to buy ATI Technologies Inc., for $5.4 billion. Here’s the complete story.amdati.jpg

AMD makes processors for PCs and ATI makes GPUs (graphics processing units a.k.a. graphics cards), motherboard chipsets, etc. ATI is primarily known for its graphics cards. Your graphics card is what your monitor connects to at the back of your PC and it determines how well your monitor renders graphics, etc.

This is the second large-scale merger between two tech companies in less than 18 months. The last big merger of such was between Adobe and Macromedia (a $3.4 billion deal) last year.
As someone who deals extensively with PC hardware and software; these mergers have left me with a sense of uncertainty about the products I love to buy and use.

An example: I love to buy AMD processors. They usually outperform Intel and they are boatloads cheaper. How does this merger affect their CPU development?

If you read some of the financial analysis of this merger, it doesn’t sound like the best thing financially with AMD. However, I’m sure if Intel did the same thing we might be hearing the same sorts of talk. Nvidia, another GPU builder and ATI’s main competition, could possibly benefit from this deal.

Another example: I love Adobe AND Macromedia products. Adobe and Macromedia build similar programs. Which versions will they keep; Adobe’s versions or Macromedia’s?

I hear they will keep Dreamweaver, Photoshop, Illustrator, Flash, InDesign, Acrobat, and some others. I’ve also heard Freehand (Macromedia’s Illustrator equivalent) is toast and maybe even fireworks (Macromedia’s Photoshop equivalent).

All of this said, we really won’t see the true fallout (or success) of these HUGE mergers until they release their first batch of consolidated software or hardware packages. I’m really anxious to see the upcoming releases from each of these mergers, and you should be too. These are some of the biggest players in the PC hardware/software markets.

This will not only affect people like me (people who make their living with computers), but it will also affect vendors such as Dell, HP, and so on. Which in turn, means it will affect anyone buying a computer in the future.



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