Dead Dell deal costs ATI dearly

ATI's share price dropped 13 per cent yesterday as investors' nerves frayed over the collapse of a deal with Dell. After the graphics card maker lost the bidding for the Dell contract to rival 3D graphics specialist Nvidia, ATI shares plummeted. The price fell C$2.40 (£1) to C$17.60 before mid-morning trading was stopped on the Toronto Stock Exchange. Before this, it had dropped as low as C$17.50, its lowest point since 13 January. ATI confirmed that the lost chip supply deal would cost the company $10 million in sales per quarter. But the company pointed out that Dell was still a customer -– it will continue to supply Rage Mobility components for Dell's notebooks. But its agreement to supply Dell's OptiPlex desktops has finished after more than 18 months. ATI refused to name the competitor to which it had lost the Dell deal. But a representative said the drop in stock price "had to do with Nvidia making an announcement on the next-generation product and some design wins with that product". ® Related Stories Nvidia unveils '256-CPU Cray' GeForce 3D chip S3 unveils Savage 2000