RealTime IT News

AMD Powers Up Its Graphics Biz

SUNNYVALE, Calif. – When AMD went looking for a graphics partner in 2006, so the rumor in the Silicon Valley goes, it initially courted nVidia. Such a pairing made sense; nVidia was only a few miles away in Santa Clara, it had outstanding graphics and made chipsets and was a market leader.

But the deal never came together, for any one of several reasons. Whichever you choose to believe, AMD (NYSE: AMD) had to settle for what many observers believed was its second-best option, ATI Technologies. Not only was ATI across the continent, it was in another country, Canada.

Now, instead of a local partner, AMD had to pick up a third major office, in ATI's native Toronto, on top of its Sunnyvale headquarters and Austin, Texas, where many executives are based. Plus there were all of the cross-border headaches.

Two years later that deal is paying off handsomely for AMD. Graphics are about $1 billion of AMD's $6 billion in annual sales, and growing. It now has its first mobile platform to compete with Intel's Centrino, it's working on a CPU-GPU combination technology called Fusion, and ATI has come roaring to life, making significant gains on nVidia in the market thanks to a strong new product offering.

That success comes from basically adopting a multi processor strategy. For its most recent video cards, ATI decided not to follow its typical course of using one large, bleeding tech GPU. Instead, ATI put two GPUs, with perhaps less than bleeding tech performance, together. When running in parallel on the video card, the duo more than made up for any lags in individual performance.

"It was a big risk, because it was a departure from what worked for 10 years," said Rick Bergman, senior vice president and general manager of the graphics products group.

It paid off. ATI's business grew 55 percent from Q2 to Q3 of this year, and 40 percent over Q3 of 2007.

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