Microsoft tipped for AMD buyout

September 14, 2015 | 13:22

Tags: #acquisition #buyout #financial #monopoly #rumour #xbox-one

Companies: #amd #intel #microsoft

Microsoft is rumoured to be in talks to acquire chip-maker AMD, as the company continues to suffer from mounting losses in both the graphics and general-purpose processor markets.

AMD, sad to say, has been struggling for years now. Although it has enjoyed a few high-profile wins, such as signing both Microsoft and Sony up as the initial customers for its semi-custom processor division, its finances tell the story of a company which is struggling to compete against industry giant Intel. Over the past few years AMD has worked to stem its losses, reducing headcount and even selling off its real-estate holdings and leasing back its headquarters, with the most recent rumours suggesting it could sell a 20 per cent stake to the Silver Lake investment group.

Now, a fresh rumour suggests that an even bigger buyout could be on the cards, with Microsoft in the buying seat. According to anonymous industry sources speaking to Fudzilla, the site which originally reported the still-unconfirmed rumours of a Silver Lake cash injection, Microsoft is interested in getting into the chip game and has picked AMD as the cheapest way to make that happen.

On the face of it, the deal would make sense: AMD's stock is at a low point, making it a cheap acquisition, and Microsoft already uses AMD technology in its Xbox One games console. With the company focusing heavily on the Surface family of portable computers, currently powered by Intel processors, having an in-house chip design firm would make future generations easier and cheaper to build - not to mention follow in the footsteps of tablet market leader Apple, which acquired its own ARM-specialist chip designer and has been using it to design its A-series of tablet and smartphone chips ever since.

Strangely, Fudzilla goes on to suggest that Microsoft could have competition on its hands for AMD: Intel. Despite the likelihood of the only two major x86 licence-holders being able to sneak a merger through regulatory approval being slim to none, the site cites 'well-informed industry sources' as stating outright that Intel is interested. It's possible, of course, that Intel could be looking to buy the recently-formed Radeon Technologies Group responsible for AMD's once-and-former-ATI graphics hardware, while leaving the x86 CPU side of the business to others.

Neither AMD, Intel, nor Microsoft have commented on the site's claims. AMD's share price spiked on the news, but ceased its its climb well short of reversing the company's recent losses.
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