Advanced Micro DevicesAMD is reportedly getting a lot of attention these days from probable acquirers and, according to gaming site, KitGuru, this time it is none other than Microsoft MSFT.
After Qualcomm QCOM and Samsung SSNLF, sources close to the matter are saying that apparently Microsoft is weighing an offer for Advanced Micro, as it is looking to enhance its chip design operations.
Microsoft: A Perfect Suitor?
If the transaction goes through, it would represent an amalgamation of a software giant with a real hardware force.
At present, Microsoft and Sony utilize AMD graphics chips in their game consoles. Microsoft itself spent more than $1.2 billion for Xbox One chips in the one and a half years of its launch. The company would be able to save this amount if the buyout is materialized.
Also, considering Microsoft’s bank balance, Advanced Micro’s $1.8 billion valuation would not be much of a problem. According to Game Debate, currently “Microsoft has just shy of $100 billion in cash, and it seems like the $1.8 billion would be better spent on investment in AMD than just lying around, racking up interest.” Microsoft could save the cash it pays out for Xbox One chips and also pick up a tidy sum from every PlayStation 4 sold.
Advanced Micro, on the other hand, is losing to both Nvidia (NVDA) and Intel (INTC). If Microsoft offers the financing, AMD could channelize more funds toward research.
In spite of being a small company in contrast to its competitors, Advanced Micro manufactures CPUs, graphics cards, server processors and SoCs and its processors power all the leading game consoles.
AMD is already Rejoicing
It appears that Advanced Micro is reacting quite well to the latest rumor as its shares rose 3% in Monday’s after-hour trading to $2.41. It had declined 5.3% in regular trading due to broad market concerns. Its shares also fell sharply on Friday, after Micron's results/guidance.
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