Advanced Micro Devices plans to make chips integrating its x86 with a graphics processor on a single piece of silicon by early 2009. The announcement came as AMD completed its $5.4 billion merger with graphics chip manufacturer ATI Technologies on Wednesday.
The project, code-named "Fusion," will lead to chips for a broad range of applications, from laptops to servers, AMD said.
PC manufacturers can already put a graphics processor next to the main processor on a PC's motherboard, rather than adding a dedicated graphics card in a PCI SLOT, allowing them to reduce the cost -- and SIZE -- of their computers.

Packaging the main processor and graphics processor on one chip will take this integration further, and lead to a jump in power efficiency, AMD said. The Fusion chips could even show up in consumer electronics gadgets and products for emerging markets, where low cost and low power consumption are often important.
AMD won't shut the door on developers of coprocessors such as physics accelerators or high-end graphics chips for gamers: the Fusion chips will continue to support such EXTERNAL devices over the PCI Express bus, the company said.

Although AMD said it will take until late 2008 or early 2009 to build the Fusion chips, other fruits of its merger with ATI will show up sooner.
From 2007, AMD plans to DELIVER versions of its Turion 64 mobile processor more closely integrated with an external graphics processor, resulting in extended battery life for notebook computers, it said.
Sounds good. When I first started reading your post, I was wondering whether that would preclude use of add-on video cards. I think that could limit their market potential. But, then you said, "AMD won't shut the door on developers of coprocessors such as physics accelerators or high-end graphics chips for gamers: the Fusion chips will continue to support such external devices over the PCI Express bus, the company said." That's good.Yes. A scary thought that you couldn't constantly be spending to upgrade your system.

On the other hand that could resolve some issues if there were standardized hardware and OEM's didn't tweak their little components, for better or worse.my newbie opinion to me is this is to maximize and lower the energy consumption somewhat but can't understand why integrating on the cpu rather than just keeping the chip on the mobo will be "that" much of a better thing?
Maybe with the speed aspects/ ram ?
:-/
Space...But can it make coffee?or at least come with a built on cup holder lol