AMD, which ATI last October in a cash-and-stock deal valued at US$5.4 billion, has said that it plans to start selling integrated chipsets combining its x86 processors with ATI's graphics chips by 2009.

In the meantime, ATI is trying to win back customer mindshare in the high-end segment of the graphics card market, for devices costing $300 or more. That segment tends to generate the highest profits for ATI and Nvidia, and it also can lead to trickle-down success or failure for their midrange and low-end offerings. ATI holds about 40 percent of the high-end market, while Nvidia controls 60 percent, according to figures from market tracker Mercury Research that were provided by ATI.

ATI also confirmed that it's nearing the release of its first processor optimized for the DirectX 10 graphics engine in Vista. Pictures of ATI's Radeon R600, which would match up against Nvidia's GeForce 8800, began circulating on the Web earlier this month. "You can assume that something -- more news, or a release -- will be coming in the next month or two," an ATI spokeswoman said.