Friday, June 02, 2006

Citigroup Analyst Yu Comments on AMD/ATI Rumors

In a research note, Citigroup analyst Andrew Lu comments on rumors AMD may seek to acquire ATI (NASDAQ: ATYT). The analyst said TSMC (NYSE: TSM) and ASE (NASDAQ: ASTSF) would likely benefit given they are ATI's main foundry and OSAT sources. Yu also said Chartered (NASDAQ: CHRT) might land some orders from ATI (aside from 0.13um graphic processor for handset) due to AMD and Chartered's relationship on CPU manufacturing and Amkor (NASDAQ: AMKR) might land some orders from ATI due to its relationship with AMD.

Citing some negatives related to a potential deal, Yu said, "ATI might lose chipset orders selling to Intel motherboard divisions; 2) ATI might lose chipset licensing from Intel (NASDAQ: INTC); 3) nVIDIA (NASDAQ: NVDA) and VIA would likely lose a majority of chipset and graphic chip shares (50% and 50% now) in the AMD platform to ATI."

Yu sees only a 30% chance of a AMD/ATYT deal.


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