According to a new report from KitGuru (via Windows Central), citing a source familiar with the matter, Microsoft is interested in acquiring the struggling chipset manufacturer AMD (Advance Micro Devices). The report further indicates that Microsoft approached the company a few months back, but the results are still unknown — if the company has really made a bid to AMD or not.
However, if you consider it from Microsoft’s point of view, it will definitely be beneficial for the software giant when it comes to console. Both Xbox and Sony’s PlayStation relies on AMD architecture, and if the deal goes through, it means that Microsoft will save over a billion dollar it pays every year to AMD. Microsoft pays AMD $100 for every Xbox One SoC which means it has already paid around $1.26 billion to the chipset manufacturer for its latest console. Furthermore, if the company somehow manages to use the same chips for its Lumia smartphones, the savings could be much higher than this.
In addition, Sony will have to fill in the pockets of the software giant for every console they sell, or use a different technologies from Intel, ARM or other manufacturers, which isn’t too simple and cost effective as they will have to design a new unit from scratch.
As far as the acquisition is concerned, Microsoft isn’t the only company looking to get hold of the chipset maker. Earlier this year, a rumor hinted that Samsung is also interested in acquiring AMD, but there’s no word from any party regarding any such news.
As for the valuation, AMD’s market capitalization rate is around $2 billion so it’s not really difficult for Microsoft to shell out this much cash. The software giant has over $93 billion in cash reserves so acquiring the chipset manufacturer is fairly easy, even for competitors like Samsung who has over $60 billion in reserves. It will be interesting to see if the news is really correct.