ATI Technologies Inc has, as expected (CI No 3,515) agreed to acquire Chromatic Research Inc, the multimedia chip developer from Sunnyvale, California. ATI, the Canadian graphics chip maker, will pay $67m in cash for the company, an amount which covers 100% of the outstanding shares of Chromatic and the assumption of all net liabilities. While ATI doesn’t appear to be interested in Chromatic’s Mpact 3 media chip, which the company halted development work on back in July (CI No 3,448), it is interested in Chromatic’s longer-term work, the development of system-on-a-chip technology that integrates graphics, system logic and processor blocks onto a single chip. The technology will be aimed at supporting multimedia applications in sub $500 computers, set-top boxes and consumer electronic devices. ATI, which recently won a contract to supply General Instrument Corp with Rage graphics chips for 7.5 million cable set-top boxes over the next three to five years (CI No 3,481) claims to have the infrastructure and economies of scale to support the technology – something that Chromatic didn’t have with the Mpact 3. With the acquisition, ATI gets all in-process research and development, rights to intellectual property including a significant patent portfolio, and fixed assets. There are around 140 engineers at the company. It hopes to close the acquisition by November 13.
