Merged AMD-ATI plans combined CPU/GPU chips in '08

Platform approach
Separately, AMD re-iterated it's plans to combine the merged companies' chips to release in 2007 a range of PC system-level designs covering business, consumer and mobile systems. AMD and ATI are setting up merged engineering teams in Taipei and Shanghai to handle the development and support of the new platforms.

The system level work will help AMD catch up with archrival Intel Corp. that has been delivering full OEM "platforms" based on its CPUs for several years. Under Intel chief executive Paul Otellini, Intel has accelerated its plans to bake its processors into a wide range of system-level designs such as the highly successful Centrino laptops that include other Intel-designed chips and software.

AMD does not yet have an optimized system-level design for notebook computers, but it said that will be one focus of its new platform work of the merged company. It does already have a consumer platform called AMD Live that competes directly with Intel's Viiv consumer desktop platform.

Despite AMD's ambitious merger it still trails Intel by far in all key areas.

The combined AMD/ATI could in 2006 have annual revenues of about $7.6 billion, profits of about $680 million, R&D expenditures of about $1.4 billion and about 14,900 employees. By contrast Intel had 2005 revenues of $38.8 billion, profits of $8.6 billion, R&D expenditures of $5.1 billion and more than 100,000 people.

In a presentation for financial analysts, AMD said the merger could give it the headroom to grow to a $40 billion in annual revenues.

AMD marshaled statements from a wide range of partners and customers—including Microsoft, ATI archrival NVidia, Dell, Hewlett-Packard and Lenovo—supporting the merger with ATI.

"We are excited by the potential benefits that this union can bring to enhance the Windows Vista experience," said Jim Allchin, co-president of Microsoft's platforms and services division, in a prepared statement.

"The combination of these companies should help the industry deliver richer computing platforms to enterprises and consumers around the world," said Shane Robison, HP's chief strategy and technology officer.