top of page
Tech Avenue +
October 2016 marks the month where 10 years ago the merger between ATI and AMD officially wrapped up. Below we look at the financial performance of ATI prior to the merger and after it as it being part of the graphics division of AMD.
As the above graph shows ATI and nVidia were neck and neck when it came to revenue and in terms of profit in the mid 2000s prior to the merger. After the merger, ATI now part of AMD's graphics division took a major hit in terms of revenue and profit. This was largely due to the various factors including the major one which was AMD's release of the HD 2900XT which was late to market and didn't have the impact in terms of sales going against nVidia's 8000 series. Later on in 2008, AMD did manage to get it's groove back with the successful launch of the HD 4800 series. This was followed by the subsequent release of a string of successful GPU launches such as the 5800 series, 6900 series and the 7900 series. By the end of 2013 with the launch of the R9 290 series and AMD winning the contract to supply semi-custom chips for Xbox One and PS4 , it propelled AMD's graphics division to bring in revenue that crossed the $2.0+ billion threshold for the first time since the merger of ATI and AMD.
Despite AMD's graphics division being competitive AMD was being hurt badly by it's CPU division which brought down the overall profitability of AMD as shown by the graph below comparing the revenue and operating profit of both AMD's CPU and GPU division showing huge losses coming from AMD's CPU division which ultimately affected the GPU division as a result of AMD having to cut jobs in the GPU division despite it's success.
So, how has nVdia been doing over the past 10 years compared to AMD? Not only, have they been doing good they have been thriving. As a matter of fact, nVidia has manged to double it's revenue to over 5 billion dollars and it now actually generates more revenue and significant amount of profit than AMD which is still in the red as shown by the graph below which covers the respective companies total revenue of their full fiscal year for the last two years.
So, this ultimately begs the question,, was it the right decision for ATI to sell itself to AMD? The answer can be best summed as:: "It was good for ATI's investors and owners but bad for ATI employees, many of whom were laid off and bad for PC gaming as a whole as it strained the resources of AMD to ultimately compete with nVidia as we are currently seeing as AMD has no answer to nVidia with respect to countering the GTX 1070 and 1080."
So is all is lost for AMD? The answer is certainly No. AMD has yet to release it's Zen processor and we are still awaiting the release of AMD's Vega series of GPUs which ultimately might turn the tide in terms of returning to profitability in the CPU division and hopefully by greater sums in the GPU division. There are already positive signs with Poaris which has enabled AMD to gain 34% market share which is significantly better than the 18% market share that AMD had last summer. With renewed focus after the creation of the 1 year old Radeon Technologies Group one can only hope that AMD will return to the glory days of it's past and who knows may overtake nVidia in terms of revenue, profit and market share just like ATI did 10+ years ago.
We will find out in the next few years.
bottom of page