AMD acquires ATI and drops prices

AMD acquires ATI and drops prices

Summary: AMD acquires ATI and drops prices - AMD acquires ATI and drops prices.

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TOPICS: Processors
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Big AMD news today.

First, AMD has announced that it is to buy ATI This price cut still leaves the FX-62 vastly overpricedin a deal that will cost them $5.4 billion ($4.2 billion cash, $1.2 billion stock).  This confirmation comes after weeks of rumor and speculation that the two companies were to merge.

What does this mean for AMD?  This deal give them access to the growing cellphone and handheld devices market, a market that's currently far more buoyant than the PC market.  This announcement might also mean that as a consequence NVIDIA will pursue the Intel market more vigorously and maybe even cut back on AMD components.

Also, AMD has announced price cuts for many CPUs.  Notably, the Athlon 64 FX-62 is down to $827 and the Athlon 64 X2 5000+ down to £310.  At the same time AMD announced that the Athlon 64 X2 4400+ and 4800+ for both Socket 939 and AM2 have been discontinued.    This price cut still leaves the FX-62 vastly overpriced, while bringing the price of the X2 5000+ to something more comparable to the Intel E6600 Core 2 Duo.  The main advantage that AMD now has is that the prices of motherboards for their CPUs are going to be far lower than those for Core 2 Duo CPUs, offering AMD CPUs a temporary advantage over Intel's Core 2 Duo.

It's pretty clear that what AMD are hoping to achieve with these price cuts it to distract user attention away from power and concentrate instead on price.  That is, apart from the FX-62 - I'm really not sure who AMD hopes will buy these insanely overpriced processors.  It would have taken a far more ruthless price cut to bring this CPU down to a competitive level and it seems that AMD have not been able to juggle the numbers in such a way that would allow this to happen.  My prediction is that AMD will have to a find way to cut the price of the FX-62 by maybe up to 50% again to make it competitive, or drop it from the line-up altogether.

The FX-62 aside, one thing is for sure - it summer bargains galore for buyers!

Topic: Processors

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9 comments
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  • 50% not enough, 70% not enough, more like 75% to make it worth it

    The FX-62 would need to come down 75% in order for it's performance to match its price compared to Conroe. That's ignoring the power you're wasting. 50 watts 24x7 is an extra $5 a month that will cost you.
    georgeou
    • It'll be discontinued before then

      AMD won't drop the price that far of the flagship CPU ... personally, I think it has a limited life now before being replaced and discontinued.
      Adrian Kingsley-Hughes
    • but wait

      i thought conroe was to be released this thursday to the consumer, if so this discussion is highly speculative .
      not of this world
      • What aspect is speculative?

        ?
        Adrian Kingsley-Hughes
    • Correction George...

      Who's paying an extra $5 a month.... or wasting more power...? At least not the people in California... ;-)

      Wonder what will happen when all the people in California start using Conroe processors...

      but on a serious note...

      Performance and price is one thing, but take a look from another perpective...

      As I recently stated in a reply to Adrian (he asked for 3 reasons why to choose for AMD, to which he didn't respond), there's also the point about the life cycle of a processor and the users ability of staying operational without having the need to replace it.

      That's a point you 'never' take into consideration! Make a calculation about that one.

      And DON'T come up with the excuse, that it's the software that makes the difference! Where talking about hardware here.
      Arnout Groen
  • Apple uses ATI and Nvidia

    I hope Apple continues to use ATI. I use Macs and ATI makes
    very good video cards. Maybe Apple will get some good deals
    from AMD and won't put those cheap Intel video processors in
    their lower priced Macs. The Intel processor deal they have
    shouldn't extend to graphics cards. I hope this will affect Apple
    in a positive way, but mergers tend to be bad for everyone.
    Adobe purchasing Macromedia is an example of a merger that
    affects everyone negatively.
    MacGeek2121
    • I was wondering that too ...

      Yes, it'll be interesting to see how this affects Apple. My guess is that things will remain as they are but with AMD calling the shots it's hard to know what could happen.
      Adrian Kingsley-Hughes
  • grammar

    Did anyone at ZDnet proof read this article?
    gnowak
    • *bless*

      Adrian was just a bit excited - hence the chip price hyperbole (in sterling - a welcome and refreshing change!) rather than talking about the real story: ATI/AMD media center SOC.
      mischief_z