AMD Dropping the ATI Name: Reports

Advanced Micro Devices, four years after buying graphics chips maker ATI, reportedly is now ready to let go of the brand.

AMD will take the ATI name off its products by the end of the year, according to news reports. Instead, the company will put the AMD name on such graphics products as FirePro, Radeon and Eyefinity.

The move comes as AMD is preparing to release the first of its Fusion APUs (accelerated processing units), which put computing and graphics units on the same die.

The first of these APUs, called "Llano" and "Ontario," are due for release in the first half of 2011, according to AMD officials.

With the Fusion APUs just months away from being launched, AMD officials reportedly said there was no longer a need to carry both the AMD and ATI brands.

It also was a question of brand recognition. Research conducted by AMD found that consumers were much more familiar with the AMD name, and that consumer goodwill toward the ATI brand grew significantly when users became aware of the fact that AMD bought ATI.

AMD paid $5.4 billion for ATI in 2006.

Currently, systems that run the graphics chips from AMD, such as Apple’s latest MacPro and iMac desktops, are labeled as having ATI graphics technology. Now they will be labeled with AMD.

ATI had been in existence for about a quarter-century when AMD bought the company. For several years, AMD executives struggled to find a place for the ATI products in their company, and AMD finances took a hit during that time.

However, AMD has pushed forward with a plan to bring its CPU and GPU businesses together. President and CEO Dirk Meyer announced in May 2009 that the company was merging the ATI business into the AMD fold, and outlined plans for what will become the APU products.

At the time, Meyer said such a move made sense, given the direction of the industry.

“The next generation of innovation in the computing industry will be grounded in the fusion of microprocessor and graphics technologies,” Meyer said.

The move has worked out for AMD, officials have said. In announcing solid second-quarter financial numbers, AMD executives pointed to the strength of their ATI graphics business, noting that revenues jumped 87 percent over the same period in 2009.

During a call with reporters and analysts, Meyer said that the biggest challenge was keeping up with demand, something AMD would correct in the coming quarters.

Analyst firms also are seeing a growing demand for graphics-enabled chips, not only from AMD but also from Intel. In a report in early August, iSuppli analysts said the growing demand for netbooks and similar form factors—including Apple’s iPad—are fueling shipments of graphics-enabled processors worldwide.

That trend will continue, according to iSuppli. In 2010, about one in three notebooks will ship with such graphics-enabled chips. That number will grow to four out of five by 2014, according to iSuppli.

Intel has the dominant position in the market, thanks to the release of its Core i processors, with their on-chip HD graphics. AMD will be helped through its Fusion APUs, iSuppli said.

However, the growth in sales of graphics-enabled chips will hurt the discrete graphics market, which could mean difficult times ahead for embattled Nvidia, the market research firm said.