AMD said near $5.5 bln deal to buy ATI

[mkreku]

25% of the competition just disappeared. We went from four big to three big companies competing. I hope this doesn't lead to something bad, but why are my Spiderman senses tingling?

[Meshugger]

25% of the competition just disappeared. We went from four big to three big companies competing. I hope this doesn't lead to something bad, but why are my Spiderman senses tingling?

<{POST_SNAPBACK}>

 

Umbrella corporation

[alanschu]

25% of the competition just disappeared. We went from four big to three big companies competing. I hope this doesn't lead to something bad, but why are my Spiderman senses tingling?

<{POST_SNAPBACK}>

 

 

What do you mean?

 

How did Intel compete with ATI and nVidia? Same goes with AMD?

 

Up until now, it's been Intel versus AMD, and ATI versus nVidia. Now it's Intel versus AMD, and ATI (the video branch of AMD) versus nVidia.

 

 

 

Yet

 

If AMD wants to make it so that nVidia chips don't work well with AMD processors, then that's a fast track to cutting off huge chunks of your marketshare and filing for Chapter 11.

 

We didn't even see it with Intel chipsets back in the day when AMD made clone processors, as well as the K6 processors. And if there would have been a perfect time to do it, it would have been then!

 

I'm also not sure how feasible it is for the processor to behave differently with different video cards in. AFAIK it's more a chipset issue.

Edited July 24, 2006 by alanschu

[mkreku]

What do you mean?

 

How did Intel compete with ATI and nVidia?  Same goes with AMD?

 

Up until now, it's been Intel versus AMD, and ATI versus nVidia.  Now it's Intel versus AMD, and ATI (the video branch of AMD) versus nVidia.

Intel makes motherboard chipsets. The competition between Nvidia nforce and Intel has always been hard. ATI has also entered the motherboard chipsets with their Xpress chips (which is why I think AMD wanted ATI in the first place, to get their hands on motherboard chipsets), so Intel competes with both ATI and Nvidia in that segment. AMD is more of an outsider as they only compete directly with Intel, but still.. how do you translate that into a percentage? I took the easy way out and just subtracted one of the competitors from the market.

[alanschu]

The chipset market is not the primary market for any of those companies.

 

As for AMD acquiring ATI for their chipsets, that would be something new. AMD at one point commented that they do not want to make chipsets, and they only made chipsets as a stopgap for new technologies (Ironically I preferred AMD's chipsets over Via's chipsets at the time).

 

To me it seems as though AMD acquired ATI for the fab facilities, not the chipset market.

[angshuman]

To me it seems as though AMD acquired ATI for the fab facilities, not the chipset market.

Does ATi have any fab facilities at all? I thought they had all their chips grown at TSMC, UMC and IBM.

[alanschu]

I should have been clearer. They'd get ATI's time at the facilities.

[angshuman]

I should have been clearer.  They'd get ATI's time at the facilities.

Ah, OK. AMD definitely needs more production capabilities. But for AMD to get any advantage from this, they'd probably have to 'steal' some time from GPU manufacturing schedules. There may be some complications due to the different libraries used by the different fabs, in case they decide to get the same processor fabbed at multiple fabs. But yes, they have gained some flexibility, no doubt.

[mkreku]

The chipset market is not the primary market for any of those companies.

So because it's not their primary market, they're not competitors..? Strange logic.

 

 

Edit: And this is what AMD wanted ATI for: Torrenza.

 

http://www.dailytech.com/article.aspx?newsid=3471

 

Who knows, maybe they wanted access to more silicon makers for $5.4 billion.. or maybe they wanted to develop this idea they presented a few months back.

Edited July 25, 2006 by mkreku

[alanschu]

The chipset market is not the primary market for any of those companies.

So because it's not their primary market, they're not competitors..? Strange logic.

 

 

Hey, you're the one that used the bizarro logic that since the seconday products competed, we just lost 25% of the competition. Especially given that AMD is known for making solid Pentium chipsets (or heck, even Athlon chipsets).

 

 

Let's be honest here, your concern over this buyout and the ramifications it may have is due to the cutthroat chipset market?

 

 

 

As for the link with discussions of Unified Development: shocking.

Edited July 25, 2006 by alanschu

[Bokishi]

This is the real emp1re!

 

[mkreku]

Hey, you're the one that used the bizarro logic that since the seconday products competed, we just lost 25% of the competition.  Especially given that AMD is known for making solid Pentium chipsets (or heck, even Athlon chipsets).

 

 

Let's be honest here, your concern over this buyout and the ramifications it may have is due to the cutthroat chipset market?

Nope, and I don't think you're dumb enough to believe that.

 

But what is your point? Or rather, what is the point you're trying to make? That we didn't lose a competitor? We did. Four huge companies became three. That they're not competitors? Maybe not in their primary markets, but multi-billion dollar second markets aren't anything to disregard. No matter how you twist and turn it, four companies, direct competitors or not, became three. Is your point that the market didn't change at all? I don't get what you're trying to say.

 

I admitted that the 25% number was a rough estimation because of their internal relations not being that easy to sum up, but what would it take for alan to admit that he might have been wrong?

 

I guess the word "Shocking" is the closest we'll ever get to that.

[alanschu]

I was thinking a bit about this.

 

Has AMD really ever been in the chipset business? In the past they have commented, on the record, that they weren't in the chipset business, and that solutions like the AMD-750 and AMD-760 were fillers to ensure that there was a chipset in place. Has this actually changed?

 

Looking around Asus' website, they don't offer a single motherboard with Socket 754, 939, or AM2 that uses an AMD chipset. The only board they still have listed as using an AMD chipset is the old A7M266-D dual core motherboard. MSI didn't seem to have any either.

 

Given that their last chipset driver pack was release May 2001 (with some updates coming in early 2002, I'm not convinced they are in the chipset business.

 

Hardware Analysis has an article from February 2005, that seems to indicate that AMD has not changed their school of thought.

With AMD it is another story, as of late they've basically only manufactured processors and left it up to 3rd party chipsets manufacturers to come up with a chipset to run it on.

 

 

Given that ATI doesn't make CPUs, and AMD doesn't make GPUs or chipsets, it looks as though the number of chipset/cpu/gpu manufacturers has remained unchanged.

 

It seems as though the "secondary market" of chipsets doesn't overlap at all, as AMD was never interested in making chipsets. And certainly not to the tune of a "multi-billion dollar" marketshare.

 

I fail to see how we "lost a competitor" when the two companies merging made no products that directly competed with each other.

 

If you look at the "big four," before:

 

2 CPU makers (AMD/Intel)

2 GPU makers (ATI/nVidia) [3 if you want to count the integrated stuff Intel does]

3 chipset makers (Intel/nVidia/ATI)

 

Now, after the AMD/ATi merger we have:

 

2 CPU makers (AMD-ATi/Intel)

2 GPU makers (AMD-ATi/nVidia) [3 if you count Intel's integrated solutions]

3 chipsetmakers (AMD-ATi/nVidia/Intel)

 

But what is your point? Or rather, what is the point you're trying to make? That we didn't lose a competitor? We did. Four huge companies became three.

 

My point is that we didn't. The products made by AMD and ATi never competed with each other. The fact that 4 big companies have become 3 has not reduced the number of companies that make CPUs, GPUs, or motherboard chipsets.

 

 

Note: I do know about the AMD-8000 series of chipsets. I just can't find a motherboard that actually uses it. It looks like they were designed for server use (since they are designed for the Opteron), which makes sense, given AMD's philosophy about chipset production. AFAIK, AMD still struggles in the server/workstation market. Probably to the point where there isn't much 3rd party support for their server solutions. It reminds me of earlier Athlon launches where AMD released chipsets while waiting for the 3rd parties to jump on board. With ATI, nVidia, and VIA all becoming active suppliers for AMD's consumer products, AMD stopped making chipsets.

 

As far as I can tell, ATi does not make chipsets for the Opteron processor either, so I still don't think we lost a competitor.

[mkreku]

That's still a strange way of looking at it. Intel used to compete with Nvidia in the chipset market and integrated GPU market, with ATI in the chipset market and integrated GPU market (integrated GPU's vastly outsell the GPU's used for gaming, so yes they count) and with AMD mainly in the CPU market. Now intel competes with TWO companies, AMD-ATI and Nvidia. If intel manages to break AMD-ATI, would you see it as we lost one or two competitors? If Intel can outsell and outperform AMD-ATI, it will be much more devastating now than when they were separate companies.

[alanschu]

That's one way of looking at it, and I'm much more willing to look at it that way. It provides an opportunity for Intel to remove competition in multiple markets.

 

The krux comes in determining whether or not AMD-ATi is stronger together, or separately. AMD just became a much bigger company, with more purchasing power as a result, as well as additional forms of revenue, knowledge sharing, and so on. It also provides an opportunity into a market that wasn't available (without licensing) to either AMD or ATI, the fully integrated system like the one in your link. Individually, they have less options available to them.

 

Obviously, I feel that the two entities are stronger together than separately. You seem to feel the other way.

Edited July 26, 2006 by alanschu

[mkreku]

Actually, I don't think the situation's changed in that regard. Nvidia has a much bigger marketshare than ATI and Intel totally dominates the CPU market. The entire situation feels like a big triangle where two of the corners are attacking one recently merged corner from two different directions. It's like Intel + Nvidia against AMD-ATI, so even if AMD and ATI are being strenghtened by each other, they also bring with them their own opponents into the deal so the combined opponent power evens out the possible strength gained by becoming a bigger company. But that's just my own speculation on the current situation.

[alanschu]

I disagree. nVidia still competes with the ATI component, and Intel still competes with the AMD component.

 

What has changed though, is that ATi will benefit from nVidia chipsets, as I doubt nVidia stops making chipsets for AMD processors. And I'm sure ATi cards will still work fine on Intel platforms, which will also help AMD now.

 

It works both ways.