Well, AMD has certainly put together a nice little run over the last couple years. The chipmaker was considered an also-ran to the mighty Intel, but now AMD has emerged as a real threat with some well-timed innovations (its 64-bit architecture, Opteron and Athlon chips), a new partnership with Dell and now a major acquisition of graphics chipmaker ATI Technologies.

The $5.4 billion deal broadens AMD's product portfolio and helps the company's
goal of unseating Intel as the world's biggest chip company. To use a sports
analogoy, this is a little like Phil Mickelson/Vijay Singh upping their golf
game to challenge Tiger Woods after so many years of so many years of Tiger's
dominance. As for ATI, becoming part of AMD should help it put pressure on its
chief rival Nvidia.

Some folks are cheering the acquisition, while others are complaining that AMD
paid too much for ATI. I don't really know much about stock prices, and I don't
trust the Wall Street analysts anyway. So here's what I do know: at my previous
job covering IT for a biz magazine, I talked to computer resellers, white box
makers, and system builders all the time, and the consensus opinion was that AMD
was out-playing Intel in the innovation game over the last couple years. A
number of system builders I spoke with regularly (who were big Intel shops, BTW)
often said that Intel couldn't touch AMD's 64 performance. However, Intel's size
and market position gave it the ability to offer lower prices and better support.

Will the chip market dynamics change with the AMD-ATI marriage? We shall
see...