Semiconductor giant Advanced Micro Devices (AMD) has bought Canadian chipset and consumer electronics company ATI Technologies, in a deal worth about $5.4 billion.
AMD CEO Hector Ruiz said yesterday during an international telephonic press conference: "As technology advances, integration is not only inevitable, but also advantageous."
He added that AMD and ATI have worked together for many years. "AMD believes there is no better partner than ATI with which to carry out our growth strategy," he told journalists.
From about 2008, AMD will move beyond current technological configurations to transform processing technologies, with silicon-specific platforms that integrate microprocessors and graphics processors, he noted.
South African impact
A spokesperson for one of the local AMD channels, who did not want to be named, said yesterday he expected "no immediate impact for at least the next six to nine months".
In a global sense, he said, Intel held a commanding position in the processor and chips market, and AMD needed to take on a strong partner like ATI in order to compete.
"However, selecting the correct combinations of competing products may for some time cause confusion for local consumers and for the channel," he added.
The financials
Robert Rivet, CFO of AMD, said during the conference call that 80% of the purchase price would be paid in cash, amounting to $4.2 billion; with the remainder paid by the issue of 57 million AMD shares.
AMD will pay $20.47 a share for ATI, a slight premium on the $18.26 closing price on 21 July 2006, on which the price is based, noted Rivet.
These considerations will comprise $16.40 in cash and 0.2229 AMD shares, he explained.
Reinventing processing
ATI CEO Dave Orton - who will serve as executive VP of AMD`s ATI business division - said the deal would mean sustainable improvements for customers, employees, partners and the industry in general.
"Starting from about 2008, we will reinvent what it means to provide processing."
All of ATI product lines will benefit, he predicted, adding that joining with AMD will enable ATI to innovate aggressively on the PC platform, and continue to invest significantly in consumer business to stay in front of markets.
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