Reports are coming in that Samsung, leading technology giant from South Korea has allegedly attempted to buy out AMD to compete head-on with Intel. With the buyout, Samsung will attempt to merge it with one of its subsidiaries. The logic behind this is to secure both CPU and GPU IP from AMD, then use that information to fuel future growth for the company. This will all add up to one super giant taking on Intel and Qualcomm head on.
This isn’t the first time Samsung has shown interest in AMD, back in 2007, Samsung’s head of telecommunications stated “it is necessary to consider the AMD acquisition in order to secure a new growth engine”.
“An immediate question comes up with regards to the cross-licensing agreement with Intel, by which Intel grants AMD the x86 license and AMD grants Intel the x86 64bit license, i.e. AMD64. Will a Samsung/AMD acquisition violate the cross-licensing agreement ? In a recent conference AMD’s CFO Devinder Kumar addressed the cross-licensing concerns of a previous buyout rumor. The one involving the Chinese company BLX IC. Kumar pointed out to when AMD spun off its fabs as Globablfoundries back in 2008. Similar concerns arose and Intel attempted to spoil the deal on the grounds that it violates the cross-licensing agreement but AMD quickly won the legal battle in court because no violation had actually occurred. And as if that wasn’t enough Intel had to pay AMD a 1.25 billion dollar fine. Simply put an acquisition deal can be structured so that it does not incur any violation on the standing cross-licensing deal with Intel.”
Now this isn’t the first time Samsung and Intel have traded blows, with Intel trying to penetrate the mobile market, it subsidised its Atom sales, which meant competitors had to reduce prices and take a hit on their profits to stay competitive. Samsung’s acquisition of AMD’s CPU and GPU IP could be a very powerful weapon in the market and also in the courts; where Samsung likes to spend most of its time lately. AMD received the majority of its graphics IP from ATi, a company created some 8 years before NVIDIA hit the market. This could mean 8 additional years of patents in Samsung’s back pocket to help fight off NVIDIA in an ongoing patent battle.
Now it’s not only in court firepower that Samsung will gain, look at AMD’s proposed line-up of releases; the high-performance x86 ‘Zen’ CPU’s, 64bit ARM ‘K12’ Core and the upcoming ‘Arctic Islands’ graphics architecture. Samsung has a huge number of assets and leverage points too that can significantly improve AMD’s competitive stance in the market as well. Chief among which is unlimited access to cutting edge 14nm FinFET manufacturing. In addition to a massive R&D budget that AMD can pour into product development.
What will this mean for the computer enthusiast market? Will Samsung allow AMD to continue battling Intel and NVIDIA in the CPU and GPU market? Or will Samsung slowly bring the company down and merge it into its own mobile CPU and GPU division to make ultra portable gaming units? Only time will tell.
Please bare in mind that this rumour did circulate around at the start of the year but nothing materialised from it, and was simply that – a rumour. This time however, there are a lot more details about the potential acquisition meaning that this could in fact be true.
Any future news on this, we will of course keep you updated.
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