Now Samsung is rumored to have AMD in its sights

The deal would still face the same hurdles as a previous Asian acquisition rumor.


Several weeks ago, an unknown in the U.S. Chinese firm BLX IC Design was rumored to be looking at purchasing struggling Advanced Micro Devices. Those rumors were quickly dismissed as just that and faded away.

Now, a story from a Korean newspaper say Samsung is looking to acquire AMD. The same issues would remain for Samsung as there were for BLX, which means any acquisition would be a long shot and very arduous.

From what I could tell from the less-than-stellar translation (Google and Bing both), the thinking behind the deal is to both boost Samsung's business, which has been faltering as of late, and to give it expertise in CPU and GPU technology.

In the case of the former, AMD still brings in about $4 billion a year but struggles to be profitable. In the latter, AMD has x86 and ARM CPU and GPU tech under its umbrella. This would allow Samsung to compete with Intel and Qualcomm, which it wants to do, but it will also draw Samsung into a battle with Nvidia, which is trouncing AMD in the graphics market.

AMD is working on an ARM-based server program and has recently rehired one of the top CPU designers, Jim Keller. Keller left AMD several years ago, went to PA Semi, which was acquired by Apple, but left Apple in 2012 to return to AMD. He is now believed to be leading the design of a new architecture for 2016 that could make AMD competitive in the x86 market again.

But one huge hurdle remains: the cross-licensing patent agreement with Intel. AMD has had one for decades and there was an anti-trust settlement with Intel in 2009. Not only are there connections to Intel for x86 IP, as part of the 2009 deal AMD was limited to using third-party foundries like TSMC to make some of its chips. Samsung has a massive chip foundry business to rival TSMC and GlobalFoundaries and would undoubtedly want to make AMD's chips, but it would be breaking the settlement if it took all chipmaking in house.

Plus, the x86 license from Intel would be null and void if AMD were to be acquired by another company. So at that point the CPU side becomes useless, unless a new deal is struck. And how likely is Intel to strike a deal with Samsung, a massive competitor in DRAM and ARM processors?

Let's say Samsung jettisons the x86 license and focuses on ARM and Radeon. The Sony PlayStation 4 and Microsoft Xbox One both use an AMD SoC with the x86 core architecture. So what would happen to the two biggest videogame consoles on the market? Microsoft and Sony would go ballistic at being left hanging like this, and I suspect AMD's contract doesn't allow them to get out that easily.

Then there's the argument that newly-minted CEO Lisa Su isn't looking to sell off the company just as she took over. Finally, can you imagine what the DoJ and European Commission would do to this merger? It would make Oracle and Sun look like a day at the beach.

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