AMD-ATI Possible Merger

Ever since the Forbes magazine has published a short story at the end of May, there have been rumors circulating on the market of a potential merger between AMD and ATI. Wall Street is circulating with gossip of the possibility that Advanced Micro Devices may be looking to acquire the graphics company ATI Technologies.

There have been consistent reports that AMD is looking to increase capacity and to diversify its agenda over the next years and ATI is ripe for the picking in the field of semiconductors. Analyst firms are predicting that future investments of Advanced Micro Devices will focus on a partnership with a graphics company, and that ATI is targeted for a merger or an acquisition.

In the eternal competition with Intel, AMD proved again and again that money is not an issue, as it has recently announced a 2.5 billion dollars investment to boost productions in Dresden fabrication plants. Analysts have also calculated that an eventual acquisition will be possible with a minimum of borrowed capital or a stock-only or stock-cash deal.

There are further speculations that ATI Technologies is contemplated as a takeover by not only AMD but also Intel, Broadcom, and Texas Instruments, following slow financial results in 2005.

Such a merger would give AMD a widened market with control over the production of CPU, GPU, and chipset.