Interesting Take on the AMD/ATI Merger

Digitimes reports according to sources at Taiwan PC makers, the AMD purchase of ATI placed more pressure on Intel in the two companies' ongoing battle in the PC market. The purchase of ATI (ATYT) by AMD will have a similar effect that Nvidia's purchase of ULi Electronics had on ATI. At the time Nvidia was looking into purchasing ULi, ATI was partnering with the Taiwan-based chipset maker on southbridge production to support ATI's northbridge. Now, Intel is the market player dependent on ATI's graphics for its high-end PC solutions, as Nvidia (NVDA) is not fully supporting Intel. With AMD purchasing ATI, Intel is expected to lose out in the short-term as there should be some disruption in its dealings with ATI for CrossFire support on the Intel gaming platform. The purchase also increased the importance of Nvidia, which has been a strong partner for AMD in the past. Intel will need to quickly develop its in-house graphics or move to strengthen its ties with Nvidia, or else AMD may be able to grow its market share to 30%.