There did not seem to be a really outstanding reason to buy ATI. For instance, if you have US$100,000 in your bank account because you've been doing well lately, you do not turn around and buy a $100k car. That leaves you with no money, simple stuff. You wait till you have $150,000 or you buy something cheaper.
But this is exactly what AMD seems to have done. It spent a lot of money on the acquisition of ATI thinking that it could continue to ride the wave and make the money back 10 fold possibly without thinking things through clearly. Something really went wrong in this plan. The company is in deep financial trouble, and it has sacked R&D staff, probably one of the most important departments in the development of a company.
Is it too late for AMD?
Well, is it really? You have to think back. Nvidia was in such a hole when it released the GeForce FX series that you would have thought that ATI would reign supreme for years to come. Nvidia bounced back though and look at them now, they are going fantastic. So surely AMD can do the same? Well normally you would say yes, like Nvidia it had a fantastic run, built up a huge profit, had loads in the bank as reserves and could survive their bad run. However, unlike Nvidia, AMD turned around and decided to spend a lot of its profit buying ATI, meaning that it must come up with a fantastic new and high selling product. But the upcoming R600 series of graphics cards has gone through a series of delays, and AM2 sales are doing nothing now for the company. Plus as we already mentioned, AMD is now at the point where it is sacking staff in the R&D department to reduce expenses and to keep their heads above water. Maybe it is the bigwigs who are causing the problems; not enough staff, not enough money, particular guidelines that are forcing them to not compete with Intel as well as they could. If all that money was not spent on ATI and instead thrown into R&D for the new generation of AMD processors, we would not be in this situation, one might think.
Maybe AMD should re-release the 939 processor *laughs*. It is going to cost a large amount of money to re-launch the 939 product range at the latest clock speeds? Also what is AMD going to do? Only release CPUs for the minority of people who cannot afford to move to a new platform, including at least new memory and graphics card? The chances are that even if 939 was re-released now, thanks to the latest Intel price drops, AMD would stand to either make no money on the 939 processors, or a best very little, nothing near what it would need to get it out of the current hole it has dug.