Rumor: Microsoft is interested in buying AMD

[Legend]

Rumor: Microsoft is interested in buying AMD - NeoGAF

In a bid to revive its chip design operations, Microsoft Corp. may acquire Advanced Micro Devices, according to a source familiar with the matter. The software giant approached AMD several months ago, the source indicated. The result of the talks is unclear.

 

The details about negotiations are unclear, just like Microsoft's exact proposal to AMD. However, since Microsoft has $95.3 billion in cash, whereas AMD's market capitalization right now is $1.81 billion, the software giant may buy AMD relatively easily. In fact, current value of AMD is three times lower than the company paid for ATI Technologies in 2006. Analysts estimate that Microsoft pays around $100 for every Xbox One system-on-chip to AMD. Life-to-date sales of Xbox One are around are around 12.6 million units, which means that Microsoft has already paid AMD around $1.26 billion for Xbox One chips. The acquisition of AMD could save it around a billion per year on Xbox One chips alone. It the company develops appropriate chips for smartphones and tablets, Microsoft's savings could be even higher.

 

The battle for video game console space is very strong. If Microsoft bought AMD, then Sony would be faced with a bad set of choices: put money in Microsoft's pocket every time it sells a PlayStation, or try to create an entirely new platform by using technologies from Intel, Nvidia, ARM or Imagination Technologies. Since game consoles is an important business for Microsoft, the company naturally wants to make sure that its technology provider does not go bankrupt or is acquired by a competitor. For example, if Samsung takes over AMD and builds-in its APUs into its TVs, it will automatically become a major player in the market of video games.

 

http://www.kitguru.net/components/an...evices-source/
 

[the-pi-guy]

"Life-to-date sales of Xbox One are around are around 12.6 million units, which means that Microsoft has already paid AMD around $1.26 billion for Xbox One chips. The acquisition of AMD could save it around a billion per year on Xbox One chips alone."


I don't think business works this way....  

[Mmm_fish_tacos]

"Life-to-date sales of Xbox One are around are around 12.6 million units, which means that Microsoft has already paid AMD around $1.26 billion for Xbox One chips. The acquisition of AMD could save it around a billion per year on Xbox One chips alone."


I don't think business works this way....  

I hope they don't actually think that way. It might save them 20 a chip.

[Legend]

"Life-to-date sales of Xbox One are around are around 12.6 million units, which means that Microsoft has already paid AMD around $1.26 billion for Xbox One chips. The acquisition of AMD could save it around a billion per year on Xbox One chips alone."


I don't think business works this way....  

Yeah that part kinda makes me think the rumor is BS.

[Xevross]

I'm laughing so hard right now. Was about to say ooh 12.6m confirmed but that stupid statement makes me not believe anything they say.

[DD_Bwest]

Rofl yea that statement about saving billions makes it sound like some fanboy rumor loLol

[Aura7541]

Yeah, I'm with everyone else. It's definitely possible for MS to acquire AMD, but NOT for saving money on XBO chips.

The 12.6m sales is actually not out of the question though

[Xevross]

Yeah, I'm with everyone else. It's definitely possible for MS to acquire AMD, but NOT for saving money on XBO chips.

The 12.6m sales is actually not out of the question though

Yeah it wouldn't be for that, they wouldn't save money because then they'd be having to pay to make the chips themselves  

[ethomaz]

If you can win them in a sales competition.
Sabotage them.
PS4 cost will go to heavens now lol

MS do a lot of that to be fair since beginning but I can list some recent cases...

- I can't stop Skype with MSM... buy them.
- I can't stop Android with Windows Phone... buy Nokia.
- I can't stop PS4 with Xbox One... buy AMD.

lol

[Mmm_fish_tacos]

If you can win them in a sales competition.
Sabotage them.
PS4 cost will go to heavens now lol

Not likely. Sony would have worked a deal with AMD that would have lasted till they stop producing the ps4. And MS as the new owner would have to honer that contact or buy out the contract from Sony which would cost billions and then Sony can take their chip to any manufacture and have it produced.

[ethomaz]

Not likely. Sony would have worked a deal with AMD that would have lasted till they stop producing the ps4. And MS as the new owner would have to honer that contact or buy out the contract from Sony which would cost billions and then Sony can take their chip to any manufacture and have it produced.

The chip is already made by TSMC... the project was made by AMD.
The problem is that a new project is needed every time Sony ask to shrink to a new lithography process like 20nm or 16nm... they will need to ask AMD/MS and that will be when they will fudge Sony.

[Mmm_fish_tacos]

The chip is already made by TSMC... the project was made by AMD.
The problem is that a new project is needed every time Sony ask to shrink to a new lithography process like 20nm or 16nm... they will need to ask AMD/MS and that will be when they will fudge Sony.

Not necessarily. Die shrink and remodels are planned to happened. They should have been considered already in the contract. At least one shrink or remodel.

[kitler53]

can't win by making a desirable product,... spends billions to ensure ps4 can't ever drop price.

classic microsoft.

[Mmm_fish_tacos]

How exactly would it work for AMD's stock if Someone did buy them? The stock is work $2.34 right now. I could buy a lot of shares right now if i wanted to. And if Some company like MS or Samsung buys them That would shoot the stock price up, right?

[Legend]

How exactly would it work for AMD's stock if Someone did buy them? The stock is work $2.34 right now. I could buy a lot of shares right now if i wanted to. And if Some company like MS or Samsung buys them That would shoot the stock price up, right?

Depends on the buyout.

AMD stock would probably be converted to Microsoft stock, and you'd get a small amount of cash to go along with it. However this is mediocre and will make you lose money or just break even.