Supplier of computer processors Advanced Micro Devices Inc. (AMD), is closed to a deal to acquire graphics chip maker ATI Technologies for USD 5.5 billion, reported Reuters.
AMD and Intel Corp. have been battling to capture a larger market share in the computer processing market.
In an attempt to strengthen its stand, Intel recently overhauled its processor lines. It introduced five new versions of its high-end Itanium 2 chips. Then the company introduced mass-market Core 2 Duo platforms for desktops and notebooks. After that the company announced a major reshuffle in its top management team to improving the company’s structure and achieving faster and better decision-making.
ATI is one of two major graphics chips makers, along with rival Nvidia Corp., and is a big supplier of chipsets, the cluster of secondary chips and interfaces that surround a computer's processor, to both AMD and Intel.
Reuters opined that such deal would shake up the processor industry, which is witnessing the battle over market share between the two companies.
AMD, which has taken business away from Intel for several quarters, has posted higher second quarter results and forecast strong demand for chips in the second half of the year. However, it failed to impress its investors amid fears of worsening price war with Intel.
Analysts are of the opinion that Intel may be poised for a comeback with the launch of its new Itanium chips.
According to a study by In-Stat in June, Intel would find it difficult to maintain its momentum in 2006 and would face slow demand and competition for its is for higher-margin products.
