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AMD Shares Soar As Rumors Swirl Microsoft, Intel Want To Take Over

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Rumors about Microsoft acquiring AMD (Advanced Micro Devices) have driven up the latter's stock market price. Intel is also allegedly considering purchasing the competition.

Several online publications have reported that Microsoft is currently in talks with AMD about its acquisition of the chip outfit. The reported rumors have created a bubble that drove the AMD stock price up by 9.24 percent as NASDAQ closed on Friday, Sept. 11. AMD was also upgraded from "underperform" to "market perform" by Bernstein, a recognized Wall Street sell-side research and brokerage firm.

Throughout 2015, several unsubstantiated news articles have alleged AMD's sale to several tech corporations such as Samsung and Apple. The most recent ones, however, claim that they have insider information regarding the acquisition.

"Our industry sources claim that Microsoft is seriously talking to AMD about buying the chipmaker," writes Fudzilla.

And while AMD's acquisition, if it does happen, would favor Microsoft's future console technology advancements and allow it to showcase DX12 through a proprietary graphics card lineup, the deal would likely sour the Microsoft-Intel (Wintel) relationship, which has been very profitable for both companies and have helped put them in very dominant positions within their respective industry categories.

Furthermore, based on how Nokia and Skype performed after Microsoft's acquisition of both, a lot of people have voiced out their opinions against the buyout. Some may argue that Nokia was already in a bad spot prior to getting absorbed by Microsoft, but the buyout has not improved Nokia's position with any significance.

The rumored-acquisition also puts in perspective the potential bias for driver support against non-Windows operating systems.

However, if Microsoft's rumored plan of acquiring AMD does push through, Microsoft and Intel, two companies with very substantial cash pools, competing against each other can lead to very interesting developments that may benefit the consumers - faster computers at a lesser price.

Another rumor floating around the internet is Intel's interest in purchasing the competition. And while this appears to have a lesser chance of happening than the Microsoft-AMD deal, some insist that it is still possible. Moreover, Intel will not have monopoly even if it acquired AMD due to the growing market pressence of other chip developers like Apple, Mediatek and Qualcomm.

There is, however, a couple of problems with the presented argument. First, all of the mentioned chip outfits are currently focused on ARM chip development and production. And although Apple has recently declared that its A9 and A9X processors have "desktop-class performance", both low-powered SOCs are not even close to replacing any of the current generation desktop CPUs.

Second is that ARM chips do not support x86 instruction set. So who would port the multitude of x86-based software to ARM? The scenario still allows Intel to have monopoly over desktop, notebook and server processors.

The even bigger question is AMD's willingness to sell. It cannot be denied that the fabless chip outfit is not having a good 2015, but its breakthrough with the HBM technology, which puts more weight to the future of its APUs and Radeon discrete graphics card lineup, is predicted to place it in a much better position in terms of market performance in the coming 2016.

Add to that its current organizational restructuring which puts the well-revered Raja Koduri as head of its graphics development arm, Radeon Technologies Group, as well as its priority access to HBM2, and AMD is quite poised to take on competing graphics card brands next year.

AMD's next-generation processors based on the Zen architecture are also much anticipated.

Given its prospects for 2016, AMD can be fine without any acquisition. However, this doesn't mean that financially struggling company will not benefit in case it got acquired by a well-funded group with chip fabrication capabilities. In this regard, Samsung, with its foundries and financial might, is more feasible to buy out AMD, since the latter's intellectual properties, together with its CPU and GPU development talent, put the South Korean multinational conglomerate in a position to challenge Intel and Nvidia's dominance over the server, desktop and notebook CPU and GPU markets.

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