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Merged AMD-ATI monster embarks on monopoly-busting

AirRaid Mach 2.5
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      07-24-2006, 10:55 PM

Intel in the crosshairs, as execs explain themselves

By Paul Hales: Monday 24 July 2006, 14:31
BEST MATES AMD and ATI held a conference call today in which the
companies' biggest cheeses sought justify their new cohabitation.

The 'excited' executives were led by AMD CEO Hector Ruiz who lauded the
deal as re-shaping the future of the industry. "We're excited about
what we can do together in a market dominated for years by one
company," in the first of many digs at arch-competitor Intel.

AMD confirmed that much of ATI's operation will be brought in-house,
but AMD will remain, "committed to ATI's customers, employers and
Canada," said Ruiz.

He added that he didn't expect lay-offs "in any significant numbers".

Ruiz confessed that AMD had been mulling its best options for a
partnership over the past two to three years and it is ATI's expertise
in the mobility space as well as its chipset business that makes the
firm such a good fit with AMD.

The ATI team will play and key role in the joint future of the company
he said, adding he was confident that the companies and their
respective cultures would integrate well together, their products
having occupied "adjacent real-estate on motherboards" for so long.

The executives, Ruiz and ATI CEO Dave Orton, along with Dirk Meyer and
chief AMD bean counter Bob Rivet were agreed the deal would provide
better value to customers and shareholders in both companies. Bob said
the merged company would be better positioned to achieve AMD's stated
objective to "break the monopoly".

AMD's customers had been insisting AMD play a bigger role in the
"eco-system" of its mobility and consumer electronics marketplaces,
said Meyer.

He said he expected the PC to continue to play a central role in both
the business environment and the home, suggesting that "non-general
purpose" processing units such as GPUs would be integrated into
computing platforms much like the floating point co-processor had
disappeared over the past ten to fifteen years.

Dave Orton confessed to being as excited as anyone. Be said the
combined company would be able to look beyond the CPU, GPU and chipset
landscapes and increase its penetration into enterprise, mobile
computing and consumer electronics sectors.

"AMD has great CPUs, we have great GPUs," he said. He reckoned the next
stage for the merged company would be to integrate its offerings,
combining two or more products to create devices that improve on the
sum of their two parts.

The new company will achieve "cost synergies" worth $75 million by the
end of 2007, increasing to $125 million by the end of 2008. By then the
company will be well into its "integration plan", more details on which
it promised to deliver soon.

The company expects to lose ATI revenues from it work on Intel
platforms which bean-counting Bob said was worth about $100 million per
quarter, a loss Ruiz is confident the company will make up for.

Dave Orton said ATI would continue to deliver Intel chipsets for as
long as its customer wanted it to.

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