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ATI move on chipset market targets Intel

Chromatic Research buyout starts to make sense at last

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PC graphics specialist ATI yesterday signalled a move into the chipset market. The announcement marks the latest stage in a strategy hatched last year, which led to the acquisition of PC-on-a-chip developer Chromatic Research last October. ATI is well known for its graphics acceleration products, such as the Rage Pro and Rage 128. That positions the company against the likes of S3, nVidia and 3dfx as a provider of graphics cards sold into the add-ons market. However, the majority of ATI's business comes through selling graphics chipsets to computer and logicboard manufacturers who then integrate them onto their motherboards, along with chipset components from other vendors. The trouble is, the chipset vendors are increasingly trying to find ways to compete with Intel, and that has led SiS and Via to add graphics to their core logic products. Even Intel is getting in on the game, with the 810 chipset it announced earlier this week. That worries ATI, not least because Chipzilla is getting its graphics technology form ATI's erstwhile arch rival in the graphics chip market, S3. Yesterday's announcement was a direct response to Intel's challenge, but this is clearly an issue that has been bothering ATI for some time. Last year's takeover of Chromatic positioned ATI to move into the set-top box market with a mix of Chromatic's system-on-a-chip products and its own 2D/3D graphics and TV/DVD decoder products. However, that mix also allows ATI to attack the low-end PC market, a move turned from a sideline into a necessity by the chipset vendors' moves into graphics. Even processor vendor Cyrix is getting in on the act -- its upcoming MIII chip also integrates graphics acceleration on the die, and will be aimed at the same sector. ATI's sales pitch centres on its Shared Memory Architecture (SMA), which integrates North Bridge and graphics acceleration chipsets, and hooks them in to the PC's main memory bank, eliminating the need for dedicated VRAM. The company promises a "full family" of SMA-based products. Samples will come on stream in the second half of the year. ®

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