AMD has seen better days, and although the company’s semi-custom processors and GPUs are doing well, the CPU business has been stagnant for years.
This is one of the reasons why numerous rumours of potential takeovers and mergers involving AMD surfaced in recent years. The latest one comes from a Seoul-based business publication.
What Samsung stands to gain from such a deal
The short answer would be IP. AMD has decades worth of patents and R&D that could prove very useful for Samsung.
The release of the Exynos 7420 was a watershed moment for the company, as it managed to beat all of its rivals to 14nm. Coincidentally, Samsung’s 14nm node is not just Samsung’s – it’s the result of a collaboration with AMD spin-off GlobalFoundries.
However, while the Exynos 7420 uses a cutting edge node, the underlying design is more or less pedestrian. The chip uses off-the-shelf ARM CPU and GPU cores, in the form of Cortex-A53, Cortex-A57 and Mali-T760 MP8 CPU and GPU designs.
Qualcomm and Apple design custom ARM-based CPU cores, while Nvidia has custom CPU and GPU cores for its tablet SoCs.
In acquiring AMD, Samsung would gain access to a number of vital technologies, namely AMD’s graphics know-how and IP. AMD also designs ARM-based server parts and rumours of AMD ARM consumer chips refuse to die. Of course, Samsung would also get access to AMD's x86 license via proxy.
What about AMD’s dowry?
On the other hand, AMD would get something much more important – money. AMD needs it, Samsung has it.
AMD could enter the mobile SoC market through the back door, and could potentially go on to license mobile graphics to vendors other than Samsung. Nvidia appears to have similar plans for its own graphics architectures – rather than using them exclusively in its low-volume Tegra SoCs, Nvidia could try to license Maxwell and subsequent architectures to other SoC makers.
A potential Samsung-AMD deal could also prove very beneficial for GlobalFoundries, as the company could step up its cooperation with Samsung, while at the same time building AMD’s x86 parts, and eventually AMD GPUs. Needless to say, this would not be good news for TSMC.
Speaking of AMD x86 parts, it’s hard to say whether Samsung would have much use for them. While the company still makes some x86 products, Samsung has dialled down its efforts on the notebook and AIO front. However, the potential is still there, especially in semi-custom APUs and low-voltage APUs that could end up in tablets and similar products.
Are the rumours true?
We don’t know. We’ve heard similar rumours before and needless to say, they did not pan out. A deal between the two tech giants could prove beneficial for both of them, think of it as a win-win situation, but that does not necessarily mean it is going to happen.
At this point, we have more questions than answers, and let’s not even get into the financial side of the story. Over the last ten years, AMD’s stock has been on a rollercoaster ride, but the long-term trend is grim. Ten years ago AMD was trading at $15+, peaking at $40 in early 2006, but it’s been downhill ever since. AMD closed at $2.63 yesterday, with a market cap of $2.17 billion.
That does not sound like a lot of money for Samsung. When AMD announced the acquisition of ATI back in 2006, it paid a staggering $5.4 billion in a cash and stock deal. At the time, AMD’s market cap was $20+ billion.
While it would make sense on more fronts than one, rumours of a Samsung takeover have been floating around for years and at this point they are not easy to believe. There's a lot of speculation and not enough facts.
Still, there is always a chance…