Advanced Micro Devices will acquire graphics processor maker ATI Technologies in an effort to emerge as a more formidable supplier of chips for business computers.

AMD has traditionally worked with multiple partners whose chips can be used with its processors to build PCs. But the company intends to use the tie-up, announced on July 24, to deliver more tightly integrated processors and supporting chip sets, in an effort to lure more businesses.

AMD has made strides with businesses of late, particularly in the server space. Its Opteron server chip has claimed more than a quarter of server processor shipments, thanks to partnerships with companies such as Hewlett-Packard, IBM and Sun. It has also won major PC deals. However the company—whose goal is to serve at least one third of the PC processor market in the future—says it still needs to do more to gain businesses' loyalties in corporate PCs, a market where Intel continues to dominate.

"Mobility and commercial are [the] most immediate areas for growth" for the combined AMD-ATI entity, Hector Ruiz, AMD's CEO, said during a conference call with analysts. "For us to be able to [grow in those areas], the one thing our customers were insisting on is we had to play a bigger role in the ecosystem of those products."

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