Summary
1. AMD got itself in a precarious position by failing to execute. 2. Nvidia acquiring AMD is not the solution. Nvidia does not need an AMD headache. Neither aspirin nor anything stronger will help Nvidia. 3. AMD needs financial and engineering resources.
Analysis
Nvidia buying AMD makes no sense." Financing the transaction might be problematic in today's tight lending market, and the assumption of more than $5 billion in AMD debt - Nvidia is not dumb. What sense does it make to take on AMD's manufacturing problems and also become a direct competitor of Intel Corp. AMD has its share of difficulties and remaining indigestion since its acquisition of ATI. AMD-ATI lost significant graphics market share to Nvidia. Had ATI remained independent, it would be mentioned today as a potential buyer of AMD. ATI was purchased for $5.6 billion in cash and stock in October 2006, NVDA won't do any better Nvidia lacks enough experience in integrating any major rival. It would have to resolve major architectural platform issues not just with AMD but also with the former ATI. Trying to deal with AMD's Fusion could be another Barcelona product execution bust. Totally dependent upon foundries for its wafer supplies, Nvidia has never had to manage its own wafer fab with its own people, let alone another company culture. An Nvidia-AMD-ATI's chances are like those of someone who urinates at the feet of the Roman army and expects that they will avoid being crushed - in this case by Intel. Intel, with its vast resources will maintain a long term processor market share of 80% or greater against any other processor player. NVDA does not need an AMD/ATI headache.
