- June 29, 2015 at 5:44 pm #70715Lil’ ½ DeadMember
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.
Microsoft Corp. has been selling game consoles for over ten years now and back in 2006 the firm even formed a division to design chips for its products, primarily game consoles. While this internal group has clearly developed some chips for Microsoft’s hardware, the company used chips designed by Advanced Micro Devices and Nvidia Corp. for its Xbox One consoles and Zune players, respectively. As it appears, Microsoft’s own chip design team cannot really develop competitive solutions for the company’s devices and in order to make its chip operations viable.
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.
It is necessary to note that Microsoft does not really need AMD. The software giant needs system-on-chips to power its Xbox game consoles, Lumia smartphones, Surface tablets and possibly other hardware devices. It does not really need server processors or high-end graphics cards. However, AMD’s management will unlikely sell a part of AMD to Microsoft since its accelerated processing units (what Microsoft needs) are based on technologies developed for server microprocessors and high-end graphics cards.
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.
AMD and Microsoft did not comment on the news-story.June 30, 2015 at 9:12 am #85947Admin1Guest
This could be good news for AMD, Microsoft has a lot of cash and could actually put AMD back on top with chips and GPUs as long as they make the right decisions.
I guess time will tell as long as AMD decides to sell to Microsoft. Thanks Kev !July 1, 2015 at 9:55 pm #85982SlackinParticipant
The resources Microsoft has (in addition to cash) could revive vital parts of AMD, I personally think that AMD marketing is dire straight and needs to be completely revamped anyways, they’ve lost control of the media, their own integrity, Every review I’ve seen posted (and sponsored) by AMD is half done or done by and AMD fanboy who used to run sites that were strictly geard for AMD enthusiasts (I think it was AMDPhenom or and another if I remember right) Despite my respect for some of the vendors and partners its obvious they are not going to make it unless they come up with a gamechanger, given their current track record that isn’t going to happen unless they infuse some new minds and new ideas to the table, with Microsoft I think they will finally have that.July 2, 2015 at 7:49 pm #86034TeeBlackParticipant
this is interesting. id like to see where this goes if Microsoft actually buys AMD.July 3, 2015 at 10:46 am #86096killjoyjimMember
I hope they do. Will be nice to see what they do.July 7, 2015 at 8:01 am #86256tobyMember
I am a little worried if Microsoft bought out AMD. If AMD were to fall as past Microsoft aquisitions have gone, then AMD is nothing but a memory.December 10, 2015 at 9:49 am #89790lordofwarParticipant
Thankfully this has not happened yet !December 26, 2015 at 10:08 pm #89955Sir-diealotParticipant
Thankfully this has not happened yet !
Hope it never happens, greedy Intel would quadruple prices on just about everything and it would just keep going up as there would be no real competition left.December 28, 2015 at 2:21 am #89959Bob2701Member
I don’t think Microsoft would let it fail.January 13, 2016 at 10:57 am #90018alan1476Participant
Microsoft just got an upgrade from a few brokerage houses on Wall St. They must be doing something right.August 8, 2016 at 4:15 pm #91732chaythonParticipant
I’ve seen 20 reports of people wanting to buy amd
but many reasons for people to buy itSeptember 26, 2016 at 9:27 am #93074vitiusParticipant
that is really good for microsoft and AMD. microsoft needs some mobile CPUs and GPUs that will be optimized for the win 10 mobile and AMD is also on the adge of bancrupcy given that they are not having so much market share. so, for me, the process of aquizision can go ahead
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