It’s official. AMD has merged its company with ATI Technologies through a $5.4 billion acquisition.

The new supercharged AMD made the announcement this morning, promoting its new Fusion initiative, a plan that will see AMD marry its CPU expertise with ATI’s GPU expertise in the x86 realm. AMD’s first target with Fusion seems to be the PC space. Indeed, AMD heavily peppered its release with the term “Vista,” Microsoft’s upcoming operating system. This is hardly surprising considering the advances AMD has made with PC makers in recent months, including a very noteworthy deal with Dell for PC space and words from the company’s CEO that it will soon be working with Apple Computer.

Consumer electronics were also hinted at and will no doubt be on their way. ATI, after all is a graphics chip specialist, and both it and AMD are highly respected in the gaming space. It’s a natural fit for them to advance in other consumer areas. All in all, the acquisition was a smart move on AMD’s part as the worlds of PC and the digital home continue to blend. Straight PCs won’t be AMD’s key market in a few years; instead, PCs that double as TVs or that shrink to the size of handhelds with entertainment options will emerge as compute and consumer become one market.

What’s unnatural so far is that Intel hasn’t snatched up Nvidia. While the rumor mill is generating such thoughts,  neither company has yet to make a firm comment on the possibility. If such a deal were to happen, Intel could maintain the upper hand over AMD – something it is owning less and less. While Intel is still the MPU leader, it’s questionable as to how it will rank versus AMD in a year. Wall Street firm Lehman Brothers has been up on AMD in recent weeks for its ATI move and down on Intel for its quarterly performance and continuing restructuring.

What are your thoughts on the AMD/ATI deal? Is Intel lagging behind?

Suzanne Deffree
News Editor, Electronic News