Graphics chip maker XGI has said it is to move away from desktop products and focus instead on embedded and server applications. The statement, made yesterday, came amid claims the company was about to be bought by ATI, and follows 3Dlabs decision to focus on embedded and mobile phone graphics chips.

“XGI has decided to move the main focus of the company into embedded and server market. The detail of this will be announced once everything gets clear,” an XGI spokesman said yesterday, according to an Xbit Labs report.

Earlier, Chinese-language website HardSpell posted claims that XGI was about to be acquired by ATI, with an announcement due today. Neither company has commented on the allegation.

XGI - aka Xabre Graphics Incorporated - was spun out from Taiwanese chipset maker SiS in 2003. It quickly acquired US-based Trident Microsystems' graphics chip division. Later that year, it dropped the Xabre brand, choosing the word 'Volari' to brand its products instead.

The company has never achieved the same level of success as the likes of ATI and Nvidia, however, with a market share generally less than a single percentage point. So too has Creative's 3dlabs subsidiary, which this week said it was getting out of the workstation graphics market to concentrate instead on mobile graphics. ®