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ATI signs Acer subsidiary as board maker

Contract manufacturer licenses Rage, Radeon

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ATI has signed its first third-party graphics card alliance, with Acer's DMS unit. The deal gives Acer-DMS - which the parent company is in the process of spinning off - manufacturing and worldwide distribution rights to ATI's graphics chips.

Some sites are portraying the partnership - described by the companies concerned, with the usual spin, as "strategic" - as something more than it is, but by all accounts Acer-DMS is simply the first third-party board builder to licence ATI graphics technology.

ATI announced only last week that it planned to sign up a number of board makers who will produce Rage and Radeon-based cards and sell them to PC system builders. ATI retains the right to sell to more lucrative and higher-profile markets.

That said, Acer-DMS' focus is contract manufacturing, so it's possible that ATI is actually outsourcing some of its own production to the Taiwanese operation, presumably to cut costs.

Indeed, the deal appears to cover ATI's next generation of Radeon chips, the Radeon 2. Radeon 2 was not part of the technology licensing programme ATI announced last week, which suggests that the alliance may indeed be a cost-saving one. If so, it won't be good news for ATI's own manufacturing staff. ®

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