AMD Ready to Swallow ATI for $5.4 Billion

In a rather desperate attempt to lift itself out of a spiraling drop into the black (or perhaps red) abyss of financial decline, AMD plans to purchase major video-card producer ATI for $5.4 billion US Dollars.

Rumours first surfaced back in May by a few wise analysts, and it appears that yesterday, the plans have finally set in motion. The attempt has been rumored as a last-ditch effort for AMD to save itself from losing all face in a bitter processing chip war against Intel. (Source: news.com)

For those not familiar with the product AMD is seeking to purchase, ATI is perhaps the gaming industry's most popular video-card maker. Founded in Markham, Ontario (yes, near Toronto), Canada in 1985, ATI has built the primary graphics cards for major consoles, including the Gamecube and Xbox 360.

In addition, Nintendo plans to use an ATI chip in its upcoming Wii. ATI's market isn't very large, with its only real competition coming from NVIDIA, another daunting card maker who make up 39% of market share (to ATI's 57%). (Source: en.wikipedia.org)

Both AMD and ATI are expected to see investment and stock improvement if the purchase is completed. For ATI, it could mean a surge ahead of the competition, and for AMD it could mean a powerful ally in a hard-fought battle with Intel that saw both companies decline in the second quarter of 2006. (Source: gamespot.com)