In 2005, AMD, then still in a much stronger business and financial position, sought to take both Intel and NVIDIA head on at the same time by acquiring NVIDIA’s rival ATI. Today, AMD is forming a new standalone division called Radeon Technology Group that it hopes will help accelerate its progress in the graphics chip market. Short of actually turning this new group into separate subsidiary, a.k.a. ATI Redux, the events seem to be hinting at the company’s increasing problems in staying afloat in both chip markets.
Despite what AMD fans would like to believe, Intel still enjoys a lion’s share of the processor market and it may soon experience a revival, both in popularity and profits, with its upcoming chips. AMD, however, did become a threat to Intel, with its own selection of affordable but adequately performing desktop and laptop CPUs. However, it needed an edge over Intel, and one area where Intel was terrible back then was in graphics.
AMD’s acquisition of ATI was both lauded and feared. After all, ATI was neck to neck with NVIDIA back then in the discrete and integrated graphics chip market and Intel’s integrated GPUs were notorious for their poor performance. Some feared that the acquisition would lead to a market monopoly that Intel could only dream of, cornering both CPUs and GPUs. A decade later, however, none of those have come to pass and the market is seeing an AMD that is even rumored to be a possible Samsung acquisition.
Spinning out Radeon, a brand that was originally owned by ATI, is a means for it to compensate and curb its downhill trend. The Radeon group will be free to go about its own business and foster its own innovation on the GPU front, while AMD will also be free not to mind GPUs and focus on CPUs, its core proficiency. Although AMD claims there are no plans to spin out the Radeon group into its own company for now, that might very well be what the future holds.
One hitch to this split, however, is APU, or accelerated processing units, chips that combine CPU and GPU in a single silicon, mostly used in mobile and embedded devices. AMD has publicly committed itself to this segment of the market, even going as far as vouching for the ARM architecture. An APU would require AMD and Radeon to work closely together, so spinning out a subsidiary might indeed be out of the question.