And with consoles AMD lucked out, because MS and Sony could have just asked nVidia to do that job.
Could they though? At the time, Nvidia didn't exactly have a CPU solution that would've been powerful enough to power the kind of consoles that both companies built around AMD's hardware. It's also a matter of cost and what we don't know here is if Nvidia would've offered a competitive price.
AMD could have bought S3 if they wanted to and they might have not sucked either. S3 actually made some pretty okay entry level (delta)chrome cards in early 2000s, their integrated GPUs in 2010s were acceptable too. And that was just S3 alone. And AMD at the time overpaid a lot for ATi, so at the time their purchase was great and took a lot of time to pay off. There was also XGI with their rather nice Volari Duo V8 card. I have read book Slingshot written by Hector Ruiz and there it was stated that AMD also needed some inhouse chipset maker and they expected ATi to do that too. If I'm not stupid, they could have bought S3, XGI and SiS for the price of ATi and have got all they need (chipsets, mobile shit, integrated graphics, beefy graphics), and some years later they also bought Matrox, where they got some expertise of how to make pro cards (which weren't that great from ATi alone, hardware was there, but they sucked at feature and technology support, their driver quality was poop and they weren't competitive with nVidia). The only thing what pushed them to get ATi is likely to avoid nVidia purchasing them as that would had been bad for them.
Ok, I think you're not quite on the right page here, or haven't really followed the industry for long enough.
S3 was bought by VIA in 2001, so clearly that wasn't on the table, as AMD only bought ATI in 2006. S3 is owned by HTC these days, for some silly reasons that I could explain, but it has mainly to do with the Taiwanese staff bonus system and some graphics patents and a lawsuit.
XGI was spun out of SiS and Trident, which had been making graphics chips since the late 80's in Trident's case.
Could AMD have bought XGI? Maybe, but unlikely as they were still part of SiS.
Could AMD have bought SiS? Possibly, but it's much harder to buy and integrate two culturally very different companies.
Could AMD have bought VIA? Possibly, but same as above, although I guess that wouldn't have been allowed, as VIA owns Centaur Technology which has an x86 license, so...
ATI was after all Canadian and would've been much easier culture wise to integrate with, vs. any Asian company.
After well over a decade of living in Taiwan, I still don't understand how or why things are the way they are here, as there's so many things that aren't done in a sensible and logical way and that applies from everything from carpentry to marketing to product development and business management.
It's not all about money and it's also harder to buy a company in a different part of the world, due to vastly different regulation.
As for Matrox, they're still an independent company based in Canada and I doubt they would've been interested in an offer from AMD.
Also, I presume you've never used a graphics product from S3 or XGI, even less so SiS, if you think ATI was bad. Man, you have no idea...
But I'm glad you're confident AMD could've done better elsewhere, yet know so little about the industry and what has been going on. Some of us have actually worked in the industry and tested all these products and more that you most likely have never heard of. Did you know Micron Technology bought a rather decent graphics chip maker called
Rendition back in 1998?
If we're going to speculate wildly here, AMD could've bought Imagination Technologies and gotten their PowerVR technology, or simply licensed their graphics technology, as Apple used to.
ATI did also buy a handful of different graphics chip makers, such as ArtX (they made the graphics chip for the GameCube and worked on integrated graphics with ALi, a Taiwanese chipset maker), BitBoys (out of Finland that claimed to have some revolutionary stuff that never made a real appearance), Tseng Labs (which was Tridents main competitor) and some other smaller players.
Regardless, at the time that AMD bought ATI, there weren't many players left to chose from. I guess they could've bought 3Dlabs from Creative Labs, but maybe that deal was never on the table. Beyond that, I don't know of anyone else that was still in business around that time so...
Anyhow, the TLDR; is this, AMD didn't really have any other real choice than ATI, regardless of what you've read or think.
