Summary
Merging nVidia and AMD is a fair question. After all, there's a lot of consolidation happening in the industry, with more to come. But this particular combination won't work well. For starters, AMD already owns ATI, nVidia's major competitor. Acquiring nVidia as well would put both of the major formerly independant graphics companies under AMD's umbrella. Apart from antitrust concerns, it just just doesn't help AMD -- or nVidia -- very much. There's no synergy between ATI and nVidia technology, so there's no real gain to be had there. AMD would find itself with two very complelx and competing technologies and no good way to combine them. The whole would be worth exactly the sum of its parts. Second, the acquisition would be expensive. AMD's had a tough enough time swallowing the price of ATI, with little to show for it. Gobbling up nVidia too would be tough. Finally, although it might take nVidia out of Intel's hands, Intel doesn't need nVidia, either.
Analysis
AMD's recent acquisition of graphics maker (and nVidia competitor) ATI made strategic sense at the time, but buying the other major graphics company won't improve its situation, especially not now. The ATI acquisiton was expensive and rocky; repeating that process won't make anyone happy.
On the other hand, acquiring nVidia would at least remove it from Intel's grasp. A defensive move, in other words. But there's no evidence Intel is interested in nVidia -- and plenty of reasons why it wouldn't be interested -- so that's of little strategic value. Intel already has a thriving graphics business (it's #3 behind nVidia and ATI) and sees little advantage in acquiring nVidia's technology only to replace its own. Besides, Intel has a philosophical aversion to adopting other companies' technolgies.
Intel and nVidia are both better off as independant entities, and AMD can little afford to acquire nVidia at this stage.
Jim Turley
