On Topic
Wasn't there news a few months back that R700 was going to be composed of X numbers of discrete chips with AMD/ATI being able to scale how many chips were used based on the market segment it was going to target? Or was the rumor about multiple "cores" making up a modular type chip? Sounds fairly similar to the research and developement that Intel is doing on their next discrete chip.
Off Topic
Also, this isn't the first time that AMD has been in "trouble" nor is it even remotely close to the worst the company has been.
AMD was in far far worse shape when Intel pulled a switch from 486 to Pentium and AMD could no longer make virtually exact copies of Intel chips. Since then AMD has been investing quite heavily into research and development. First with the 586, then eventually the K6-2, K7 (Athlon) their first truly successful chip and then the K8 (Athlon 64).
The years between their 486 days and their Athlon XP days were bleak and much worse than what they are going through now.
Also, considering that the ATI division is currently almost (around 40ish?) percent of their incoming revenue. It'd be suicide to kill off the discrete business which is what is feeding ATI's integrated motherboard chipset solutions.
Also, lest you forget. A strong Discrete part is the equivalent of millions of dollars of free advertising via word of mouth and reputation.
I'm fairly certain AMD isn't quite that stupid and incompetant that they would kill it off.
Then again, companies have done stupider things in the past.
Regards,
SB