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Doug Friedman, an analyst with American Technology Research, said that graphics chip maker Nvidia Corp. could well acquire x86 microprocessor maker Advanced Micro Devices in order to “re-architect it”. The acquisition is considered to be useful due to the fact that roadmaps of AMD and Intel Corp. threat Nvidia. The only problem for the graphics giant is that AMD’s x86 license is a non-transferable one.

“We believe AMD [could] face mounting pressure from shareholders, to restructure the company with a focus on a change in leadership,” said the analyst.

Indeed, shareholders of AMD are hardly pleased with the company’s performance in the recent quarters as well as issues with the launch of quad-core microprocessors and the release of DirectX 10 graphics processing units. Nevertheless, late last year AMD managed to secure $622 million from Mubadala Development Company, which means that there are those who believe in AMD.

But despite of the problems that AMD has had, its roadmap of integration graphics cores into central processing units (CPUs) threats Nvidia: not only AMD increases its market share on the market of graphics adapters, but it transforms graphics solutions into commodity, which may potentially affect Nvidia’s revenues going forward.

“The Intel/AMD roadmap of integration of the CPU/GPU could pose a risk to Nvidia, and buying AMD propels Nvidia into a formidable competitor for Intel with the upside coming from Huang’s ability to re-architect AMD’s design,” said Mr. Friedman.

At press time, AMD’s market capitalization was $3.82 billion and it has $1.89 billion in cash. Nvidia Corp.’s market capitalization at press time was $13.01 billion, besides, the company had $1.85 billion in bank.

Perhaps, Jen-Hsun Huang, the chief executive of Nvidia, could re-architect Advanced Micro Devices in order to make it profitable. However, due to the fact that wide cross-licensing agreement between AMD and Intel, which is also believed to cover x86 instruction set, does not allow AMD to transfer any of Intel’s technologies to any third-party. As a result, if AMD is acquired by Nvidia, the new company will not have rights to produce x86 central processing units (CPUs) or utilize any technologies from Intel. 

It is uncertain whether Nvidia, or any other company that has no wide cross-licensing agreement with Intel that covers x86 instruction set, is interested in getting AMD and not interested in making CPUs. But what is almost certain is that various antitrust organizations would be against the two suppliers of discrete GPUs becoming one.

Discussion

Comments currently: 25
Discussion started: 02/14/08 11:31:18 AM
Latest comment: 03/09/08 10:43:49 AM
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[1-6]

1. 
I don't think the SEC will like the monopoly in the GPU market. I won't either, but I don't own nvidia or AMD stock.
0 0 [Posted by:  | Date: 02/14/08 11:48:58 AM]
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2. 
I thought IBM had this kind of contract with Intel...
0 0 [Posted by:  | Date: 02/14/08 12:54:41 PM]
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lol, please name a chip based on x86 that IBM fabs itself.
0 0 [Posted by:  | Date: 02/15/08 08:18:01 PM]
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Crusoe? IBM's x86 license is what allowed Transmeta to get away with not having one.
0 0 [Posted by:  | Date: 02/15/08 11:06:30 PM]
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3. 
Does nVidia even have enough resources to acquire AMD? I mean, AMD is having problems right now, sure, but it still seems like too big of a bite for nVidia. Not to mention it would suck for the graphics card market. To be perfectly honest, I don't think this will happen.
0 0 [Posted by:  | Date: 02/14/08 07:58:43 PM]
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4. 
Doug Friedman is a moron can people stop lending him credence by reporting on his ramblings he is ridiculed in the industry for knowing nothing about the graphics industry at all.
0 0 [Posted by:  | Date: 02/16/08 03:56:52 AM]
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Its been speculated a long time for now that someone will pickup AMD.. IBM, Samsung, Nvidia, TI have been on that list.

If the CPU & GPU will merge in the next few years then Nvidia would be a logical choise.
But if the x86 license is non-transferable I guess they would need to make some kind of deal to get another one of those first.
0 0 [Posted by:  | Date: 02/17/08 02:15:27 AM]
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Like AMD taking over nVidia...
0 0 [Posted by:  | Date: 02/17/08 08:06:09 AM]
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5. 
if this happens then we can all welcome a new monopoly. anyway i won't buy a gfx card now until the 2nd next gen major from now, so it has physx built in. don't much care about the half arsed job they are doing now.







www.taxi583.com
0 0 [Posted by:  | Date: 02/17/08 03:22:03 PM]
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6. 
Wow! What a horribly written article! Riddled with spelling mistakes and grammatical boners, this article is an affront to journalism, professional or otherwise. Did anyone proof-read this piece of garbage? Try hiring an editor, they'd work wonders for your credibility.

Even if we overlook these problems and focus on the content itself, the article fails to remind readers that ATI, Nvidia's rival, is owned by AMD, effectively making NVidia the owner of its only real competition. That is a monopoly, with or without the top hat.
0 0 [Posted by:  | Date: 02/19/08 05:10:02 AM]
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