The AMD acquisition rumor is one of those stories that just won’t go away. AMD people have learned to live with the rumor, even if the company should actually be on an organic growth path following its split in 2008 and a few decent quarters. However, an acquisition of AMD could make sense for some companies with moderately deep pockets.
AMD Phenom II X6
AMD’s upper management can’t complain that these rumors are coming up as it has not been a special talent of the company to fix problems quietly. In recent weeks, there has been some turmoil as the board fired CEO Dirk Meyer and COO Robert Rivet was let go as well. Rumor has it that then board wasn’t especially happy with Meyer’s product strategy and the company’s overall slow response to the mobile market. Some suggest that it was a personal matter and that chairman Bruce Claflin did not like Meyer anyway.
A report published by Barron’s hints to a potential buyer: Dell. Seriously? Doesn’t Dell have enough problems of its own and what would Dell want with a processor company? And hurt its relationship with Intel? If Dell is interested, then HP may be as well, especially if they want to be with Apple much more 1:1. It’s a stretch to imagine either one of them would be seriously interested in buying AMD. However, a company that is already in the processor business, could have its eyes on AMD, which could be available for about $10 billion, given its current market cap of about $6.17 billion.
The smartphone business has brought up a lot of wealth in the ARM sector and there are a few companies with deep pockets such as Qualcomm, which has about $10.5 billion in the bank, or Samsung, which has more than $11 billion. Windows on ARM will create a feeding frenzy among ARM vendors, especially if we look at threats that, for example, Nvidia poses to the environment due to its GPU expertise. Some may want to break out of the ARM trap and could be looking for to open the door to the x86 world, which could be very enticing once we consider that WebOS and ChromeOS will be asking for market share in the x86 segment.
Qualcomm looks particularly interesting as the company has already a relationship with Google and the Palm tea, at HP and, not to forget, Qualcomm already owns AMD’s former mobile GPU business, which was based on the Imageon series of graphics processors.
If there is any acquisition interest in AMD, then I’ll put my bets on Qualcomm.
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