Advanced Micro Devices (AMD) has agreed to buy Canadian graphics chip vendor ATI Technologies for about US$5.4 billion in cash and stock, the companies announced Monday.AMD sees the merger as a way to offer integrated products for the mobile computing and consumer electronics markets, it said. From 2008 onward, it intends to offer a new range of integrated processing and graphics chips for custom applications, it said. The acquisition, which is subject to shareholder and regulatory approvals, 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.In the last fiscal year, a combined AMD and ATI would have made sales of around $7.3 billion, the companies said. AMD CEO Hector Ruiz and ATI CEO Dave Orton ATI and AMD expect to complete the deal in the fourth quarter, subject to approval of ATI shareholders and U.S. and Canadian regulators.Rumors that AMD would buy ATI have circulated for a couple of months. If approved, 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 chipsets 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.AMD will take on new debt of approximately $2.5 billion to finance the deal. ATI has agreed to pay AMD a termination fee of $162 million if it backs out.-Peter Sayer and Sumner Lemon, IDG News Service (Paris Bureau)This article is posted on our Microsoft Informer page. For more news on the Redmond, Wash.-based powerhouse, keep checking in.Check out our CIO News Alerts and Tech Informer pages for more updated news coverage. Related content brandpost Sponsored by Freshworks When your AI chatbots mess up AI ‘hallucinations’ present significant business risks, but new types of guardrails can keep them from doing serious damage By Paul Gillin Dec 08, 2023 4 mins Generative AI brandpost Sponsored by Dell New research: How IT leaders drive business benefits by accelerating device refresh strategies Security leaders have particular concerns that older devices are more vulnerable to increasingly sophisticated cyber attacks. By Laura McEwan Dec 08, 2023 3 mins Infrastructure Management case study Toyota transforms IT service desk with gen AI To help promote insourcing and quality control, Toyota Motor North America is leveraging generative AI for HR and IT service desk requests. By Thor Olavsrud Dec 08, 2023 7 mins Employee Experience Generative AI ICT Partners feature CSM certification: Costs, requirements, and all you need to know The Certified ScrumMaster (CSM) certification sets the standard for establishing Scrum theory, developing practical applications and rules, and leading teams and stakeholders through the development process. By Moira Alexander Dec 08, 2023 8 mins Certifications IT Skills Project Management Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe