The AMD-ATI Merger

As someone who builds my own custom PCs (and also as a video game fanatic), I like to keep track of anything that might affect what parts I buy and how much they cost me. So when AMD bought ATI on July 25th, I asked myself, “How does this affect me?” Well, I came up with an answer.

AMD and ATI make a similar product. Even though CPUs and graphics cards have little to do with each other in themselves, they are designed the same way. While AMD makes CPUs, ATI makes GPUs; as two different types of processing units, they perform different tasks but are effectively constructed the same way. Each one reads a set of instructions from its respective memory, interprets them, and returns the processed material back to whatever asked for it. That being said, the two companies should be able to work together, creating better CPUs and video cards. And who knows, maybe they’ll cost a little less too, if manufacturing costs go down.

I’m really disappointed by the direction NVIDIA and ATI are taking these days. The graphics card market has basically become an arms race, with each company striving to make a faster card no matter what the cost. Sure, my new video card is faster than my old one, but it’s also more power-hungry, hotter, louder, bigger (I can’t even replace a memory module anymore without taking out the video card first), and, of course, more expensive. (Let me clarify that last one. Both cards fall in the same percentile performance-wise. But my new one, an NVIDIA GeForce 7800GT, cost me $135 more than my 6600GT, after the same amount of time following their release.)

Of all of these, I think the most troublesome is power consumption. Sure, it may not seem like a big deal now, but wait till your computer alone has the power (no pun intended) to blow a fuse. At a recent trade show both companies announced that before they could implement any significant power-saving features, graphics cards would approach 300 W apiece. Add to that a system with quad SLI (allowing four cards to be used in the same system), and you have yourself a system that runs at around 1500 W (with other parts included), or the same amount as 15 standard 100 W light bulbs. And it will produce almost as much heat as those light bulbs. Don’t forget about the really loud fans that have to blow that heat out, either. As a fan of quiet computing, I’ve learned that the best way to cool your computer is to buy products that make less heat, not to buy bigger and louder fans to blow it out and into your room-with a 1500 W computer, that’ll soon cause a cooling problem for your entire house.

That’s where AMD comes in. If you’ve been following the CPU market for the last few years, you’ll notice that AMD managed to score a processor that performs better than Intel’s Pentium 4 (and successive Pentium D) architecture, is more power-efficient, and costs less. So what did Intel do? They developed Core 2, which leapfrogs AMD’s Athlon 64 and takes the lead once again. And throughout all of this, processors have decreased in price dramatically (the least expensive dual-core processor, back when dual-core first came out, was around the $500 mark; Intel’s Pentium D 805 is now less than $100, in less than two years). This is the kind of competition we need between ATI and NVIDIA. The kind where no matter whose product is better, the consumer wins. Intel and AMD are the epitome of capitalism working the way it should. Let’s hope ATI and NVIDIA get dragged into it too.

As a specific example, AMD could help with the power issue I discussed above. Recently AMD has made breakthroughs in CPU power consumption that allow a processor to run at much lower power levels without compromising performance. Perhaps their solutions could be implemented in (or adapted for) ATI’s graphics cards. And if ATI does it, NVIDIA doesn’t have a choice but to follow; look what Intel did when AMD lowered their power levels.

So basically the short answer to my question is this: competition is healthy for everyone, and AMD will help to create that necessary competition in the graphics industry. This competition will result in better products (not just in terms of performance but also the other, often overlooked, aspects of video cards) at possibly lower prices. And last time I checked, that was a good thing.

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