AMD plans to buy graphics chip vendor ATI for $5.4 billion, The Wall Street Journal newspaper reported on Sunday. The deal could be announced later today, it said.
AMD plans to host a conference call for a "significant corporate announcement" at 8:00am EDT (1pm in the UK), the company said. A Web cast of the call will be available online. ATI and AMD executives in the US could not immediately be reached for comment.
The acquisition would turn AMD into one of the world's largest providers of graphics chips. ATI reported net income of $31.9 million on revenue of $652.3 million during its fiscal third quarter, which ended on May 31. At that time, the company said revenue for the current quarter would be between $620 million and $690 million.
Rumours that AMD will buy ATI have been circulating for a couple of months. The deal will add significantly to AMD's product line, bringing in a lineup of cutting-edge graphics chips and chipsets that include integrated graphics capabilities. Chipsets are the component on a PC motherboard that link a processor with main memory and other components, such as a hard disk.
These additions to AMD's product line will help the company better match rival Intel, which offers its own line of chip sets with graphics capabilities. But the deal could threaten AMD's relationship with nVidia, ATI's main rival in the graphics space and an important AMD partner.