Microsoft may be interested in buying struggling chip vendor AMD

By Harish Jonnalagadda
published

Microsoft may be interested in buying AMD, according to a new report citing unnamed sources familiar with the matter. Microsoft has a lot to gain by acquiring AMD's APU business, given the Redmond giant's ambitions in the console gaming segment. Both the Xbox One and PlayStation 4 use AMD's Jaguar-architecture APU, and if Microsoft were to buy AMD, Sony will have to shell out a significant amount of money to Microsoft on each PlayStation sold. The vendor can side with other chip manufacturers, but that will mean designing a new APU from scratch.

Microsoft isn't the only company rumored to be mulling an acquisition of AMD. Qualcomm's name has also been suggested, with the mobile chip vendor said to be interested in AMD's server business. Qualcomm CEO Steve Mollenkopf recently stated that the vendor was looking to bolster its efforts in the server segment through a merger or acquisition, with AMD the only likely contender that Qualcomm can acquire at this stage.

Samsung was also mentioned as a vendor that would be interested in leveraging AMD's CPU and GPU IP to challenge the likes of Qualcomm and Intel. AMD's current market valuation of $2 billion is low enough that all three organizations listed above can acquire it using their cash reserves. Microsoft has $93 billion in cash, Qualcomm has over $12 billion and Samsung has $66 billion in its cash reserves. However, given the nature of AMD's licensing portfolio, there will be significant regulatory hurdles before any deal goes through.

Source: KitGuru

260 Comments
  • Microsoft take it and not let it go in Samsung's hands...its the f**king great deal
  • $2 billion is a steal for Microsoft. They bought Nokia Mobile for $8 billion.
  • i don't know... surface pro 5 with AMD? i prefer intel... and it would not be simple to act as a competitor to intel...
  • I really like Intel over AMD but if Samsung is interested, then by all means MS should buy. The best solution would be that AMD lived on. It's not healthy to leave Intel alone in the market.
  • We've seen what happens when Intel is left alone and in charge.  $200 desktop chips and no innovation. Intel DO make the absolute best chips, but thats due to their R&D budget that is more each quater than AMD is worth as an entire company. I love AMD simply because they do the most interesting stuff and at unbeatable prices so long as you don't need my-processor-is-faster-than-yours-penis-augmentation.
  • Entry level Surface with AMD?
  • I prefer AMD over Intel! This would be an awesome move surface with new hbm and kavari infrastructure, which I still ahead of Intel!
  • It would reduce battery life, so i dont think they would do that. AMD just cant compete with Intel/ ARM in highly mobile devices, their TDP is just too high, which means they would need larger cooling systems and a bigger battery. They might compete again soon in the notebook sector due to their strong integrated gpus, but Ultrabooks, Phones, and Tablets remain in the hands of Intel and ARM.
  • Whats to stop them licenceing an ARM design and using the AMD skillset/factories to make customisations or manafacture it. This would reduce the cost as the manafacture is not having to make a profit. Like Commodore did when it bought MOS.. alloed them to make cheaper products as they owned the full process. Vertical intragation for the win! :) (I never thought I would ever say that)
  • AMD doesn't own any factories, they used to have a stake in Global Foundries, but had to sell that off a while ago. Also, AMD's expertice is mostly in x86 and not ARM all though they have begun getting back into ARM the past couple of yeard it is mostly through partnerships.
  • ARM is not powerful enough for consoles and, besides, would need a complete overhaul of DirectX. Although Windows RT used ARM, it was not a full stack system.  Almost all the Win32 things were stripped off and only the basic stack was kept for Office. These kinds of deals sound great on paper, but are way too risky.  Intel won't just sit there, watching.  They will react by backing Linux. Alas, Samsung getting all of AMD's IP, makes it for a tempting offer.  They have cross licensing deals with Intel which will remain in case of a buyout.  Also, AMD went fabless long, so it could opt into Samsung vast microprocessor operation.  Ironically one day you could see x86/x64 chips rolling out besides Apple A9 pieces. Complex decision making ahead  
  • Hrmm,  Intel getting stronger in backing Linux.  In that case by all means.. MS, Please buy AMD!
  • No they would probably use Intel's skyline. They need and for the Xbox and windows phones they manufacture not for the surface line
  • Guy Guys chill chill only the APU department will be sold to Microsoft, thats the department that does the graphics cards mostly. They wont be acquiring the CPU division and neither will they put it in their Surface line up
  • Do you know what an APU is? Is the combination of CPU and GPU which is pretty much AMD. Plus the article didn't say that are purchasing one business alone. It says they are interested in purchasing AMD. Inks the article is wrong in the details.
  • How about a surface pro with options for consumers? AMD or Intel. Intel chips are super expensive and cost microsft a lot of money. Surface pro will be cheaper with in house AMD chip if microsoft decides to buy  
  • Most consumers don't know the difference, so this may just as well confuse them. Hypothetically, the Surface line will probably stick with Intel chips and the Xbox line will stay AMD. This acquisition would probably drive costs down while receiving royalties from Sony and whomever uses AMD chips. This purchase would be a huge win for Microsoft. 
  • I'm not sure how they could extract more royalty from sony.  The PS4 deal is years old and probably includes price stuff as well as die shrinks.  MS/AMD will still have to stick to that deal.
  • Yes now you may, but the only reason Intel is better than AMD is because they don't have the cash to compete, give them what they need and they will be neck to neck with Intel before to long.
  • Dude the valuation is 2 billion not the sale price. It will probably go for around 6 billion or so, stock holders need to be compensated big before they give the ok
  • I'd rather be compensated out of $2b than not at all if the inevitable happens and AMD slips further into debt and is finaly gutted and the bits sold off for a pittance.
  • If and when that time comes AMD's holding could still bring in good money for shareholders when sold off individually.
  • Agreed, but they will risk alienating their huge Intel based OEM ecosystem.  I think they would be ordered to divest the x86/x64 section immediately and only keep the APU which, ironically, took a lot of time to merge with the CPU side.
  • Well the graphics and arm part of it are the only use parts at this time as their cpus still run hot
  • What is hot? My 8350 with a nepton 280L maxed hits like 70c. And that's even rare. In the end really is mostly only a few cents more per year than Intel to run. So performance to price value AMD all the way. Intel can kiss it.
  • I'm not shure if you get it, that logic you use is completely fine for desktop usage, but for mobile you need to be horribly effective in energy consumption, and that is not one of AMD's fortes 
  • Nor intel's either. AMD has an ARM license, not sure when they'll start to make use of it, if ever.
  • Hot means to perform the same amount of work as an Intel chip, you have to pump more power into it and use better cooling. Those are big concessions in the mobile arena. AMD is years behind Intel in development. AMD chips are fine if you are using a desktop where you can afford the extra space for cooling, and you can always pull more power from the wall, but not so great for many higher-margin applications.
  • Ye all are missing the point, i.e. Sony. By acquiring AMD, Sony will have to pay microsoft for their console chips(which are too many). Xbox also uses it which means MSFT wont have to pay rougly 80 dollars for one chip to AMD. It's a steal for even 5 billion dollars.
  • I prefer someone like Sprint for a purchase. A network is more valuable and  inline with most if not all of Microsoft's products from server to Xbox to tablets,pc,phone, hologen. I value Intel as a long time friend and partner in fact, we can say the two grew up together with each becoming quite formidable. With AMD, you must really have a solid plan to make it a profitable acquisition because Intel and Qualcomm between the two really covers the territory from power chips to long lasting low power chips.  
  • Go Microsoft go!!
  • They should do it!
  • This would be amazing, think of how great they could make their processors, and maybe specifically engineer CPUs that are great for the surface line
  • Vertical monopoly (;
  • They wouldn't be buying a solution(?) for Surface line chips, they'd be buying a struggling business that would compete directly against one of their biggest partners...
  • What experience does Microsoft have of designing microchips? There's nothing stopping them from paying AMD to design great chips for them now, so what spend billion$ on an acquisition? Microsoft making great processors... Hmm. I see bloat and inefficiency, unreliability, and an architecture that breaks with every new iteration.  
  • They actually do have some. AMD64 had some collaboration between MS and AMD. Cutler was involved, at least with the wow64 software.
    Microsoft XCPU (Xenon), MS/IBM Vejle, Hololens chip, Xbox One chip, Kinect motion sensor chip
    They have people like John Sell, chief architect Xbox One silicon. There's probably some people at MSR also.
  • Their research arm has designed processors, hpu, quantum, gpu for server, ect
  • I dont want an AMD chip in my SP3.........but what i do want, is a Raedon powered docking station.......Intel integrated graphics undocked, but dock it, and BOOM............full desktop beast
  • You'd prefer intel integrated than AMD integrated? Wow.
  • Yeah, of course. It's so much more efficient, in a thin device like the surface you can't just toss in more battery capacity so that you can put an AMD badge on it to make fanboys happy. Intel integrated graphics are pretty good, comparatively.
  • As much as I love Microsoft. I wouldn't want anyone to buy AMD. Maybe the CPU division of AMD but not their GPU division.
  • AMD's biggest and only real value is in their "APU" products, as mentioned in the article, which combines a CPU and a discrete GPU on a single chip. Selling the two parts separately would actually kill the actual value of either part.
  • "However, given the nature of AMD's licensing portfolio, there will be significant regulatory hurdles before any deal goes through."
    Yep, if Microsoft goes for it, the deal will raise all of kinds of red flags. It also will complicate things with Intel
  • Intel already hates Microsoft and wants to move away from them so I say ban Intel from being used on new Windows PCs. Little punks they are at Intel.
  • But Intel chipsets are so much better than AMD.
  • AMD is best in gaming not intel. In AMD Gaming graphics are great.
  • I am sad to say this, but AMD isn't best gaming. Sure the GPU performance of their APU is better than the GPU performance on Intels "APU", but most gamer want to have a dedicated CPU and GPU, and then Intel is the best choice for CPU and Nvidia is the best choice for GPU.
  • AMD best in gaming? no ... that statement has no basis in fact ... core for core Intel outperforms AMD in every way,
  • Not when it comes to gaming, and games simply don't utilize any extra performance on the CPU side that intel might provide. I play new games at 4K on a Phenmom II x6 with radeon graphics and max out the screen's refresh rate with everything turned to high.  Using an intel chip at twice the price or nvidia GPU costing 3 times as much for a 25% bump in performance simply wouldn't/couldn't be noticable. Software has to catch up first, and its doubtful this will ever happen, at least in the current environment where half backed games are let free and patched for years.  There just isn't the time needed to make things good anymore.
  • +1, Only a Intel CPU in my computer builds. You pay a little more but, the quality is there. Had a AMD CPU once, never again...
  • Quality like that floating point bug? You're mistaking quality for speed.  And you don't pay a 'little more' you pay a LOT more for the same performance.
  • Dang, where on earth do you get that from?
  • With IOT Intel has a scope partnered with Microsoft. They are just disappointed bcoz of low PC sales.
  • Lol. Intel wont survive if MSFT ditches them. They will bite the dust in no time.
  • Ha
  • I prefer AMD over Intel! This would be an awesome move surface with new hbm and kavari infrastructure, which I still ahead of Intel i7 in core tech, but not speed
  • For the price AMD is good in some areas. But overall Intel and NVIDIA are just better.
  • Depends on the matricks you rely on.  Their integrated GPU solutions are way better than intel, and as far as I'm aware nvidia isn't an x86 chipmaker. They straddle a weird world where discrete and integrated graphics overlap with x86 processing and a pinch of pixie dust.
  • Being offered jobs at Intel, and seeing the animosity Intel employees have towards Microsoft, I say let them buy AMD and put Intel out of business. Intel has higher quality chips but they suck. And for gamers, well they could just acquire their CPU division.
  • I never knew Intel employees treat Microsoft bad,what gives? Any sources?
  • I always saw Intel and Microsoft as buddies. Huh.
  • But why?
  • I'm in love with the Microsoft brand just as much as the rest, but as a PC builder this is drawing the line a little too far. I don't feel like I could trust them enough to retain enough distance from the GPU division to allow for price competition with Nvidia.  They better start treating PC builder's with more respect if this ever indeed comes into fruition.  Bundling a free Windows 10 lisence with every off the shelf component would be an excellent start.
  • Yes yes yes yes yes
  • How does getting into chips help them with there core buisness.. 
  • The advantage would be dramatically reduced costs for Xbox and probably AMD integration (and cost savings) in Surface/Lumia line. The disadvantages for the market as a whole are spelled out elsewhere. I, for one, hope they do not do it, but if the only choice is one of the 3 companies mentioned in the article, Microsoft may be the "least bad" option. Same as with the purchase of Nokia. An successful, independent Nokia would have been better, but MS purchasing them was better than any of the realistic outcomes at the time.
  • Nokia is successful and independent. Loss making division was sold to MS.
  • And yet they have said they're getting into smartphones as soon as their agreement with MS ends. Nokia makes nice enterprise stuff, but do we really need yet another range of boring and buggy/crashy/slowy android devices?
  • I hope it doesn't go ahead, either. It really wouldn't benefit MSFT enough to warrant the billions spend to acquire AMD. It would be cheaper to pay AMD to design chips especially optimised the XBOX.
  • I'm all for Microsoft getting AMD if you can trust them to do the right thing, but if you look at what they did with Nokia's Lumia division, I not sure it's a good thing
  • So what did they do to Nokia?
    I think it's the right decision.
  • Nokia weren't making the world's most-used GPUs, powering five of the six main consoles in the last two generations.
  • They're doing things properly, which Nokia in the end did not.
  • Doing things properly? They haven't released a high end phone in more than 12 months. They released the 535 with a terrible touchscreen that still has ongoing issues....
    They have released multiple product lines that crossover and confuse the public....and most critically of all, MS has stagnated for years with their OS development.
    They tied Nokia in to a licencing deal, then gave them a sub par operating system which made it impossible for Nokia to succeed. For example, the 1020 shouldn't have been hobbled with a slow processor. However, it was, because Microsoft didn't provide timely support for improved processors.
    Microsoft were lucky to get Nokia into a licencing deal. Nokia made Windows Phone what it is today...
  • I agree with you. MS has taken too long to implement basic features that have been available in other OS or a long time, we have only received cosmetic changes. I love WP, but MS entered the game late and has been to slow to imporve it.
  • Nokia, just lost their way and become stagnant.. when that happens you become irrelevant. Just take a look at blackberry... they could have hit it out of the park with the playbook but that was half finished. One would have hoped Microsoft saw that and wouldn't have released the RT tablets half baked.
  • Only for the sake of buying...this would make Microsoft and Intel direct competitors...if any deal remotely happens...and Microsoft has nothing to gain from it...what only for making chips for Xbox and producing GPUs...but I can see it helping Azure and all the data centres they are planning..if they can shell out 2 billion for a game...then AMD is street cheap for 2 billion
  • Intel isnt making any friends anyway.
  • If MS buys them out, it will be great for their mobile and gaming market. I'd rather have AMD APU than Intel on a Surface. They are better performance on games than Intel chips.
  • Not anymore.
  • Ah haha.  You been smoking some bad stuff man.  Intel's HD6000 GPU is pretty bad considering you're paying more than twice the $ for a similkar performing chip with it. Intel hasn't had a good/compeditive gpu since the days if the i740 (or whatever it was called)
  • It it, really?! Cus as far as I know even the phenom II processors beat the new APUs in performance.. And you are comparing APUs to the Intel core processors :/
  • And what benefit does better gaming have for the businesses at whom the Surface is really aimed?
  • I prefer AMD over Intel! This would be an awesome move surface with new hbm and kavari infrastructure, which I still ahead of Intel
  • Intel i7s and i5s are so much better overall. AMDs lack multitasking power. But are almost half the price.
  • When comparing i7 4770 to 8350, they do have very competitive scores, amd are not far behind they just didn't release against 2 gens of i7. If amd new Zen chips come out next year with the benches like they say then we should be in for a treat!
  • But you're not taking everything into account there. You say those two solutions have similar 'Scores' but you overlook that i7s overclock much higher, pull less power (which translates to $ over time) and can perform at similar levels without as much demand for cooling. All these factors, even on the desktop, make the Intel solution cheaper and more flexible for different purposes or builds. Then if you look at mobile, where efficiency and heat are a large part of the big picture, Intel is so far ahead of AMD that AMD isn't really relevant for most applications.
  • Seams this would threaten their Intel relationship drastically. But what would Intel do? Stop making processors for PCs? Probably their largest market by a wide margin.
  • Servers need processors too. And even if MS would buy that sinking ship AMD it would not affect OEM's that actually make most of the PC's.
  • the sheer amounts of license revenue Microsoft collects right now is more then they gain from some of their core businesses if they buy AMD those numbers will simply sky rocket that's a big deal
  • Imagine them collecting $100 for every PS4 sold.
  • That's to much. LOL
  • According to AMD's own financials, the "sheer amount of license revenue" is not enough to make them profitable, and total revenue is only about $5 billion per year, versus Microsoft's revenue of over $20 billion per quarter, or over 10 times the revenue of AMD. Buying AMD will, most likely, be a net drag on Microsoft's financials for a year or so until they can realize the cost savings in new products.
  • How?! AMD is barely profitable...and gets royally spanked in pretty much all areas aside from console gaming!
    Nvidia does better GPU's, and Intel does better CPU's.
  • For a start furyx beats the NVIDIA titan x, so that lies there in 4k gaming, titan x only benefits in 8k gaming
  • Don't know where you saw that as benchmarks show the gtx 980ti spanks the fury while drawing less power and generating less heat (it's not hobbled to a water cooler)...
    .
    Doesn't beat a titan x anyway, think I'd argue is not meant to, as per: Rockpapershotgun, pcgamer and digit forums and toms hardware - the fury and 980 Ti are equivalent and both are great. The titan x is a whole other beast at an insane price bracket.
  • So which has the best bang for buck?  Hint, its NOT and never has been nvidia.  And until 4K or even 8K becomes the norm there is no benefit in buying a card that has a huge part of its potential performance sitting idle because there aren't enough poixels,  Both AMD and nvidia chips are far more powerful than can be delivered at 60fps on a 1080 screen.
  • And AMD does way better than both of the others when you combine the two.  Integtarion is where the world is heading.
  • It sounds good for their business and for marketing.
  • If Microsoft buys it, my next build will be AMD.
  • All the Microsoft/windows phone rumors today I feel like I need a break
  • Such a sad decline from AMD's once glory days with the AMD Athlon64. Seems like AMD hasn't really caught up since those days.
  • I know
  • Read up why that is. Intel knocked them down through shady practices. Its quite sad really.
  • Yup.... couldn't play fair, they knew they would have a fight on their hands instead they went for the lowest sucker punch they could muster.
  • No it actually started with Intel Core CPU and went down from there when AMD said making a quad core out of 2 dual cores would amount to nothing and actually Intel's Q serious quads spanked AMD like never before.
  • Definitely shady practices of Intel essentially bribing OEMs not to use AMD was a main reason for it, but also the inability of AMD to adapt to the multicore market fast enough didn't help their issues. I remember AMD64s destroying Intel Pentiums in the benchmarks.
  • They'd be the ultimate hardware/software company!
  • Do it
  • wait no AMD powered Commodore Amiga learning machines going to be released now? I was saving my pennies and everything!
  • Microsoft. The saviour of the sinking ships.
  • If Microsoft really acquires AMD, Microsoft can be the next Apple. You see, Apple makes their own chip (Apple A7), their own software (Mac OS dan iOS), and their own hardware (Macbook, iPad, and iPhone). Microsoft could do this, too. Microsoft would make their own chip (AMD-based), their own software (Windows dan Windows Mobile), and their own hardware (Xbox, Surface, and Lumia). Way to go Microsoft!
  • And look what have apple become. I dont think that's a good idea
  • Apple has become wealthiest company in the world..
  • They're the wealthiest company in the world because they have a complete walled garden ecosystem and they don't give anyone in their entire supply chain any profits. They set the wholesale prices of their hardware high and enforce an RRP just a fraction higher. Apple are wealthy because they're extremely selfish. None of the above applies to Microsoft.
  • "They're the wealthiest company in the world because they have a complete walled garden ecosystem and they don't give anyone in their entire supply chain any profits." Really because Apple suppliers have been having record profits lately.... "Apple are wealthy because they're extremely selfish." - Apple is a business, not a charity. The only reason for its exantance is to make as much money as possible, for as long as possible, and to provide value for its shareholders. Nothing more, nothing less. Same applies to Microsoft, dont try to pretend otherwise.
  • There is something called "mission", you know?. Micosoft's one needs more than just profit: it needs a huge marketshare, all kind of products, from the 'low-end' to the 'top-tier', and that requires partners. Apple don't need such things, because they don't care about how to reach everyone: they just want the people it takes to win as much money as they can. Inside that model, small businesses, poor people and the governments from the 3rd world don't count, despite their computing needs.  
  • So basally your sayung Apple and Microsoft use different strategies to make money, but both of them do, just In different ways. Microsoft need huge market share so they can make a profit...
  • Um a corporations main goal is to acquire profits plain and simple. They aren't humanoid with no emotions. They are an entity who's purpose is to profit and create revenue. That's it. Apple has it nailed down. That's the goal for companies including Microsoft. Posted via the Windows Central App on my Lumia 640 XL
  • And that is why I mourn the loss of Nokia. A company with morals and one that displayed a real duty of care to the people who worked for it, and for the people who bought its products.
    Microsoft and Apple are borne in that vicious American cycle of business that literally only cares for profits.
    The world would be better if companies were forced to behave as Nokia once did.
  • Nokia failed and had to sell its main business because it wasn't follow the main rule of business, to make money! The world companies would have no money and have to.sell them selves off it that where so (just like Nokia) 
  • In Shia LeBeouf's words, just "DO IT"! :D
  • Intel, NVIDIA and all other companies affected by this will come together to build an OS or Linux distro to beat windows os.
  • Cool story bro.
  • Do you think they haven't already been trying?
  • Yes, those Linux distros have been a real threat over the, wait for it... decades!
  • HAHAHA throwing another linux distro into the mix will just further fragment the linux ecosystem
  • meanwhile ... back in the real world
  • Lol
  • What about their partnership with Intel?
  • Do you not think with their increasing focus on Linux and Android that has begun to sour that relationship?
  • I love AMD, All my computers are AMD CPU & GPU or APU. THIS IS AWESOME
  • Couldn't Microsoft give their partners for windows products a good deal on the chips and hardware in order to pass regulations
  • Just worried about Intel if they go for AMD. Intel is also a crucial player in Microsoft's businesses. From PC to IOT.
  • Intel is more about everyday things, like IOT, PCs, etc. AMD is more about gamers desktops and Console etc. Not much overlap Posted via the Windows Central App for Android
  • AMD are pretty huge (not intel-huge though) in the notebook market.
  • Not going to happen, the legalities alone will prevent that as the monopoly it would create... would just be dire for all concerned (except Intel who would be laughing all the way to the bank).
  • What monopoly?  So long as there is at least one compeditir then its not a monopoly. A monopoly is when 70% of the market or higher is sucked up by a single entity, you know, like Intel bribed and intimidated their way into being.
  • Intel CPU's are so far ahead of AMD right now, its not even funny. Honestly, Intel needs some better competition. People are starting to think they are milking us cause they don't need to give us better performance for our money. Same with nVidia, actually. They both need more competition. Posted via the Windows Central App for Android
  • Is AMD really doing that bad. And Qualcomm acquires AMD? Why I think it should be the other way.
  • Buy it Microsoft
  • I love amd but it looks like not good
  • ?
  • I completely agree with your reasons. Oh...
  • Do it Microsoft
  • I rather Microsoft invest in a video sharing company like Vimeo or Vidder
  • +730
    Or start a YouTube competitor from scratch. One can dream.
  • You don't remember Soapbox?
  • Vimeo is your best bet... I mean starting from scratch is the worst case scenario
  • But MSFT loves to start from scratch.
  • Yes please, I have grown accustomed to AMD cpu and gpu in the past few years. Having Ms run it and put its resources means we will finally have heated battles between and and Intel once again.
  • What if we get Lumia with amd??
  • AMD APU's are nowhere near as ready for mobile devices like smartphones compared to Intel's Atom SoC. But perhaps with Microsoft's help, AMD could enter the mobile market and together with Intel, they could flood the market with more x86 powered smartphones and eventually defeat ARM.
  • Done
  • Just buy the GPU business and leave out the server business to Qualcomm= the best next gen Xbox+ better control over GP