To: JR2 who wrote (811 ) 10/26/1998 10:44:00 AM From: fiberman Read Replies (1) | Respond to of 1010
ATI buys Chromatic: NEW YORK -(Dow Jones)- Canada's ATI Technologies Inc., one of the leading makers of computer graphics chips, Wednesday agreed to acquire privately held Chromatic Research Inc. in a deal valued at $67 million. It includes cash and the assumption of Chromatic's debt, although a specific breakdown wasn't provided. Reports surfaced earlier this month that ATI was in talks about possibly buying Chromatic, a small but well-regarded chip designer. ATI became the world's biggest graphics-chip company this year, surpassing competitors S3 Inc. (SIII) and Cirrus Logic Inc. (CRUS). ATI's growth in recent years has been fueled by its graphics chips and boards for desktop personal computers, but the company faces increasing competition and price pressure in that market. While ATI officials expect to ship 30 million graphics chips in 1998, compared with about 15 million last year, they are hedging their bets by diversifying into notebook computers and digital television cable set-top boxes. Chromatic Research, based in Sunnyvale, Calif., develops media processors, technology that would enhance ATI's graphics/multimedia portfolio. ATI had said that an acquisition would also help augment its position in the industry for personal computers valued at less than $500, and the set-top box and consumer-appliance industries. A media processor is a versatile general-purpose chip that can process 1.5 billion instructions a second to display advanced graphics and digital video. Chromatic Research's Mpact media processor can replace a computer full of specialized cards by working with software to acquire DVD, videophone, video-editing; 2D-and-3D graphics, audio, fax and telephone capabilities. In addition, the use of add-on cards enables $1,000 PCs to perform like far more expensive machines by offloading multimedia-processing tasks from the machine's central processor to versatile media processors. In July, however, Chromatic said it was cutting about half its work force and discontinuing work on its programmable Mpact media processors to focus on a new type of media processor with lower development costs. The Mpact chip, one of the most complex graphics chips on the market, was apparently too much for the small company's resources. In place of the complex Mpact engine, which could issue as many as three instructions per cycle, Chromatic was said to be focusing on a design that combines simpler processor cores working in parallel. A combination with ATI would give Chromatic the resources it needs to continue Mpact, experts say. In addition, ATI faces a big threat from Intel Corp. (INTC). The semiconductor giant is moving into the market with its I740 chip. Peter Glaskowsky, an analyst at Micro Design Resources Inc. in Sunnyvale, Calif., has said the I740 is the fastest product yet that combines multiple graphics functions on a single chip. In 3-D, a handful of companies compete for high-end markets, while Intel is likely to sweep the low end with its Whitney chipset, which uses an i740 3-D controller for graphics functions. And I do not know why??? What will Chromatic give to ATI? Why didn't they buy some body like Nvida, or 3DFx, or even our beloved 3dLabs????? What are we expecting for quarterly loss? I think TDDDF's PR department has taken a whole damn year off!!!!!