AMD and ATI announce merger

24 July 2006 17:32 GMT / By Amber Maitland

Processor manufacturer AMD is in the process of acquiring graphics card specialist ATI for $5.4 billion, in a deal that they hope will close by the end of the year.

After news of the merger was released, ATI's stock prices went through the roof, while AMD's plummeted.

Investors fear that AMD is paying too much for the graphics company.

The merger puts both Intel and Nvidia under a great deal of pressure, as it means that the conglomerate can present competitive, integrated solutions to computer manufacturers.

ATI has previously preferred Intel as a platform for high-end graphic solutions, but the merger means that ATI may run on AMD instead.

Some analysts predict, however that AMD will still use Nvidia graphics, so perhaps ATI will stick with Intel platforms.

It's all just speculation at the moment.

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