Originally Posted by Forbes
AMD-ATI Merger Looks Likely
Advanced Micro Devices may be looking to buy graphics company ATI Technologies, a move that would benefit the overall graphics industry, according to RBC Capital Markets.
"The synergies of this seem consistent with the recent announcements by AMD to significantly increase capacity over the next few-years," wrote analyst Apjit Walia in a note to investors Wednesday. "We believe ATI is a rare-buy in the semiconductor space right now given the near-term tie-up dynamics."
Walia based his prediction on recent checks in the PC food chain. RBC has an "outperform" rating and $23 price target on ATI, and no rating on AMD. The firm expects ATI to report fiscal 2007 earnings per share of $1.06.
It has long been discussed that the graphics-companies are likely to be bought by one of the microprocessor companies, according to Walia. However, for AMD-rival Intel (nasdaq: INTC - news - people ), a partnership with a graphics company may not be the best idea.
Forbes Market Scan: AMD-ATI Merger Looks Likely
One of the strange things about this possibility is that ATi gets ALOT of it's business from chipsets for Intel. This would change the semi-C map alot. They also say it would be good for the graphics business, but I don't see it?...........