Advanced Micro Devices (AMD) plans to buy graphics chip vendor ATI Technologies for $5.4 billion, The Wall Street Journal newspaper reported on Sunday.
AMD plans to host a conference call for a "significant corporate announcement" today at 8am EDT (Eastern Daylight Time, 1pm UK time) in the US, the company said.
The acquisition will 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 range 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 will likely threaten AMD's relationship with nVidia, ATI's main rival in the graphics space and an important AMD partner.