Advanced Micro Devices Inc. and ATI Technologies Inc.

Case:

Key Words:

competition restraint, economic benefit

Reference:

Fair Trade Commission Decision of September 28, 2006 (the 777th Commissioners' Meeting)

Industry:

Computer Components Manufacturing (2614)

Relevant Laws:

Article 6 , 11 and 12 of the Fair Trade Law

Summary:

1. Advanced Micro Device Inc. (hereinafter called "AMD"), a US company, planned on indirectly acquiring all of the common shares of ATI Technologies Inc. (hereinafter called "ATI"), a Canadian company, through its Canadian subsidiary company, 1252986 Alberta ULC. Through the transaction, ATI will become a subsidiary company of AMD. AMD therefore filed a merger report to the Fair Trade Commission (FTC) pursuant to the law.

2. Findings of FTC after investigation:
   This merger fits the type : "where an enterprise holds or acquires the shares or capital contributions of another enterprise to an extent of more than one-third of the total voting shares or total capital of such other enterprise" and "where an enterprise directly or indirectly controls the business operation or the appointment or discharge of personnel of another enterprise," stated in Articles 6(1)(ii) and (v) of the Fair Trade Law. In addition, Both AMD and ATI had a sales amount of more than the threshold announced by the FTC in the previous fiscal year. Thus, the merger of said two companies met the requirements of merger reporting provided in Article 11(1)(iii) of the Fair Trade Law. As a result, this merger shall be reported to the FTC. Furthermore, in accordance with Article 7(1)(ii) and (iii) of the Enforcement Rules of the Fair Trade Law, the applicant of a merger report shall be the holding, acquiring or controlling company under the merger, which in this case was AMD. Therefore, the FTC admitted this merger report for further review.


3. Grounds for non- prohibited:
   AMD is in keen competition with INTEL, a CPU enterprise. INTEL also specializes in the development of graphic systems providing not only the graphic system in its products but also an integrated platform. However, AMD specializes only in CPU and has not developed its specialty in graphic systems. ATI is dedicated to research, development and marketing ability of graphic systems. In light of the aforesaid facts, this merger for AMD will bring support of advanced graphic technology and elevate its leverage in the competition with INTEL. In addition, this merger will provide domestic computer subcontractors with one-stop shopping service and convenience of single assistance window. On the other hand, this merger involves a merger of the business of computer accessories . All participating enterprises own their professional skill in their relevant market separately and don't exist competition relation in each other. No obvious impact was to be placed on the market structure and market share of the horizontal market after the merger. Furthermore, AMD stated that it will continue to provide open platforms and standards and cooperate with upstream and downstream businesses. Therefore, this merger did not seem to have obvious impact on the competitors regarding the technological connection and upstream/downstream relations and w ould not cause concerns of competition restraints. The overall economic benefits shall outweigh the disadvantage of competition restraints after the merger. As a result, the FTC, pursuant to Article 12 of the Fair Trade Law, determined not to disapprove the merger.

Appendix:
Advanced Micro Devices Inc.'s Uniform Invoice Number: none
ATI Technologies Inc.'s Uniform Invoice Number: none

Summarized by Yeh, Su-Yen; Supervised by Liou, Chi-Jung