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ATI confirms Chromatic buyout

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Graphics card specialist has confirmed its intention to acquire media processor developer Chromatic Research in a deal worth $67 million. As predicted by The Register (see ATI prepares Chromatic buyout), ATI's interest lies in Chromatic's work on system-on-a-chip (SOC) products for set-top boxes. Chromatic has been developing an SOC since it became clear its Mpact 2 2D/3D graphics acceleration and video chip had failed to win the support of PC manufacturers, largely because users prefer the power of a dedicated graphics acceleration system of the kind that ATI produces. "Chromatic's development to date adds significantly to our technology portfolio and allows us to extend our competencies into fast growing markets," said ATI VP of engineering Adrian Hartog. ATI is undoubtedly hoping Chromatic's technology will enable to break into the emerging set-top box market, predicted by market research organisation IDC to grow by 76 per cent per year between 1998 and 2002, with some 55.7 million devices in use by the latter date (see Digital TV to lead information appliance market). And ATI's role as the leading supplier of graphics acceleration technology to PC manufacturers puts in a strong position to provide core technology to those of them who wish to extend their product lines into the information appliance market. Its relationships with PC vendors are going to be essential if ATI is to compete with the likes of National Semiconductor's Cyrix subsidiary, which is also developing information appliance-oriented SOC product, and embedded specialists like Motorola. ® Click for more stories

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