[WCCFT]Samsung may aquire AMD

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flash-gordon

Member
May 3, 2014
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Shink you tend think very short term; Samsung doesn't.

X86 License wouldn't be an issue either. There is a small little clause between FTC and Intel; if AMD is ever bought out; Intel can't do a single thing first 30 days about licensing. They then need to go into nagoations with the new owners of AMD to renew the license with good faith and they have up to a year; if they don't renew license with that first year and there was no real nagoations in good faith. FTC will investigate and possibly break up Intel for breach of monoply laws....

FTC purposely put that in there to prevent Intel from killing second source for x86 cpus. If Samsung bought out AMD; it would spell trouble for Intel.

The biggest hurdle won't be X86 license; it would be US government; US government already said they'd block sale of AMD to middle east....

Samsung; might have a chance to get around it....
If this happen, the negotiation won't be after the buyout, you can be sure.

I think we don't know the real nature of this and the cross licence issue could be true for 20 years ago, but AMD has critical IPs and the balance is different now . And there's FTC, for sure they wouldn't leave Intel alone in the market.
 

Timorous

Golden Member
Oct 27, 2008
1,955
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Intel also gets to keep the x86-64 tech if AMD is bought. Really, it seems like it is water tight for Intel. Govt Intervention is of course a possibility but given the competition that ARM poses it's less of an issue.

I did not know that. Seems daft for AMD to have agreed to that considering it is the single biggest piece of leverage they have on Intel. I guess they needed the cash from the settlement that badly that the short term benefit outweighed long term considerations.

I doubt it is the only IP that AMD have that Intel use but it certainly the most important from a cross licencing perspective.
 

ShintaiDK

Lifer
Apr 22, 2012
20,378
145
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I did not know that. Seems daft for AMD to have agreed to that considering it is the single biggest piece of leverage they have on Intel. I guess they needed the cash from the settlement that badly that the short term benefit outweighed long term considerations.

I doubt it is the only IP that AMD have that Intel use but it certainly the most important from a cross licencing perspective.

It works both ways. And AMD cant make x86 or x64 CPUs without Intels IP.
 

Timorous

Golden Member
Oct 27, 2008
1,955
3,816
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It works both ways. And AMD cant make x86 or x64 CPUs without Intels IP.

That is kind of the point though. They need each others IP to do business so without such a clause should AMD get purchased the new owner would have Intel in a compromised situation regarding the 64 bit extensions. I can understand why Intel would not want to be in that situation but I cannot understand why AMD would give up such a strong piece of leverage so cheaply. Desperate times call for desperate measure I guess but that sort of leverage for $1.25B is cheap.

Do you have a source for that clause though as I have spent time trying to find something on it and had no luck yet.
 

geoxile

Senior member
Sep 23, 2014
327
25
91
Lolwot, Intel does not simply get to take possession of AMD's IPs. The license is simply valid until the rest of the agreed upon term. Imagine that, if a company just lost all its IPs if it were bought out, that would make the purchase pointless for the buyer.
 

Timorous

Golden Member
Oct 27, 2008
1,955
3,816
136

Timorous

Golden Member
Oct 27, 2008
1,955
3,816
136
Lolwot, Intel does not simply get to take possession of AMD's IPs. The license is simply valid until the rest of the agreed upon term. Imagine that, if a company just lost all its IPs if it were bought out, that would make the purchase pointless for the buyer.

Looking at the document it will terminate of its own accord when the last patent in the agreement is expired.
 

geoxile

Senior member
Sep 23, 2014
327
25
91
Looking at the document it will terminate of its own accord when the last patent in the agreement is expired.

That's when both companies operate normally. Look at the termination clauses.

5.2c

Termination Upon Change of Control. Subject to the terms of, and as further set forth in, Sections 5.2(d) and 5.2(e), this Agreement shall automatically terminate as a whole upon the consummation of a Change of Control of either Party.
5.2d
(ii) In the event of any termination of this Agreement pursuant to Section 5.2(c), and subject to the provisions of Section 5.2(e), the rights and licenses granted to both Parties under this Agreement, including without limitation the rights granted under Section 3.8(d), shall terminate as of the effective date of such termination.

5.2e seems to be about bankruptcy procedures.

Admittedly the jargon is beyond me, but to me it sounds like this particular agreement is voided if there is a change of control, which can include when a company is acquired by a different company.
 

AnandThenMan

Diamond Member
Nov 11, 2004
3,991
626
126
It doesn't matter what is in the contract, if AMD is bought out and Intel tries to terminate the x86 agreement they are instantly going to be on the hot seat with regulators. And really there is NO reason for Intel to insist on terminating x86 rights unless they are not confident in their ability to compete.
 

5150Joker

Diamond Member
Feb 6, 2002
5,549
0
71
www.techinferno.com
It doesn't matter what is in the contract, if AMD is bought out and Intel tries to terminate the x86 agreement they are instantly going to be on the hot seat with regulators. And really there is NO reason for Intel to insist on terminating x86 rights unless they are not confident in their ability to compete.

Intel would have to be the biggest fool's on the planet to let a giant company like Samsung in so easily. Of course they would stop it and the regulators would take their side, not that of a Korean company. And it's no longer a monopoly even with AMD out as ARM is a much bigger threat.
 

Timorous

Golden Member
Oct 27, 2008
1,955
3,816
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That's when both companies operate normally. Look at the termination clauses.

5.2c

Termination Upon Change of Control. Subject to the terms of, and as further set forth in, Sections 5.2(d) and 5.2(e), this Agreement shall automatically terminate as a whole upon the consummation of a Change of Control of either Party.
5.2d
(ii) In the event of any termination of this Agreement pursuant to Section 5.2(c), and subject to the provisions of Section 5.2(e), the rights and licenses granted to both Parties under this Agreement, including without limitation the rights granted under Section 3.8(d), shall terminate as of the effective date of such termination.

5.2e seems to be about bankruptcy procedures.

Admittedly the jargon is beyond me, but to me it sounds like this particular agreement is voided if there is a change of control, which can include when a company is acquired by a different company.

Yes but the significant provision is 3.8(d). In essence should AMD be purchased the contract gets terminated but provision 3.8(d) comes into play granting Intel licence to the IP of AMD as if AMD still existed and was bound by the agreement. The new owner would not have an agreement because this one was terminated and would need to renegotiate terms with Intel. Now this also applies should someone purchase Intel with AMD getting access to Intel's licences on the same terms so it is even in that regard it is just that Intel is in a much stronger financial position.

What happens with regulators after such a thing though is a totally different matter. I was pretty ignorant coming into this thread not realising that a change of control for either company would trigger such a clause (although I assumed a breach of contract would) but now I know better.
 

geoxile

Senior member
Sep 23, 2014
327
25
91
Yes but the significant provision is 3.8(d). In essence should AMD be purchased the contract gets terminated but provision 3.8(d) comes into play granting Intel licence to the IP of AMD as if AMD still existed and was bound by the agreement. The new owner would not have an agreement because this one was terminated and would need to renegotiate terms with Intel. Now this also applies should someone purchase Intel with AMD getting access to Intel's licences on the same terms so it is even in that regard it is just that Intel is in a much stronger financial position.

What happens with regulators after such a thing though is a totally different matter. I was pretty ignorant coming into this thread not realising that a change of control for either company would trigger such a clause (although I assumed a breach of contract would) but now I know better.

But it says 3.8(d) will also be terminated, without limitation, under 5.2d. I assume without limitation means 3.8(d) will be completely voided.


(ii) In the event of any termination of this Agreement pursuant to Section 5.2(c), and subject to the provisions of Section 5.2(e), the rights and licenses granted to both Parties under this Agreement, including without limitation the rights granted under Section 3.8(d), shall terminate as of the effective date of such termination.
 

GodisanAtheist

Diamond Member
Nov 16, 2006
8,041
9,301
136
If Samsung bought AMD, it would be for AMD's GPU/CPU IP, not because Samsung execs think they're going to get rich beating Intel at their own game.

I am sure they would 86 (pun intended) AMD's x86 cross licensing agreement and either sell off or scrap AMD's x86 cpu division. Samsung is an embedded/custom SOC/mobile company, not a high performance CPU company, and they really don't appear to have any interest in anything that isn't embedded/custom SOC/mobile (I think they even ditched their laptop/desktop lines).

AMD's GPU division might undergo a smoother transition and survive. The market isn't quite as set on the GPU side (performance wise, marketshare is a whole different story), its generally cheaper from a R&D/development standpoint than x86 CPUs and stands to directly benefit Samsung's core business. Whether we keep getting discreet high performance GPUs is another story entirely.

The ultimate irony might be that Intel/Nvidia stand in the way of this going through. Although both camps would get to declare "victory" in their respective markets, the DOJ might not look too favorably on the market dominance that results. Intel/Nvidia are probably perfectly happy with a weak/gimped AMD holding on to a 25% or less market share, weak enough to not pose a threat but strong enough to keep the prying eyes away.

/end rant
 

Timorous

Golden Member
Oct 27, 2008
1,955
3,816
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But it says 3.8(d) will also be terminated, without limitation, under 5.2d. I assume without limitation means 3.8(d) will be completely voided.


(ii) In the event of any termination of this Agreement pursuant to Section 5.2(c), and subject to the provisions of Section 5.2(e), the rights and licenses granted to both Parties under this Agreement, including without limitation the rights granted under Section 3.8(d), shall terminate as of the effective date of such termination.

I do not speak legalese at all so it is quite possible I have misread it. If it does terminate as a whole though without one party getting access to the others IP it would put Samsung (or any other potential purchaser) in a strong position regarding the negotiation of the X86 licence from Intel.
 

Stuka87

Diamond Member
Dec 10, 2010
6,240
2,559
136
$62.4 billion in cash reserves in November 2014
http://www.businesskorea.co.kr/arti...rgest-conglomerates-increased-16-trillion-won


AMD have 187 million stock holders in total
AMD is currently worth $2.64/stock
In total AMD is worth: $493 million

I think Samsung can afford $0.5 billion...

Thats not what it would cost to purchase the company. You have to look at physical assets as well as what the IP is worth. The company would sell for *WAY* more than 500 million.
 

metalliax

Member
Jan 20, 2014
119
2
81
$62.4 billion in cash reserves in November 2014
http://www.businesskorea.co.kr/arti...rgest-conglomerates-increased-16-trillion-won


AMD have 187 million stock holders in total
AMD is currently worth $2.64/stock
In total AMD is worth: $493 million

I think Samsung can afford $0.5 billion...

Thats not what it would cost to purchase the company. You have to look at physical assets as well as what the IP is worth. The company would sell for *WAY* more than 500 million.

AMD has 777 million shares outstanding, and holds a market cap of right around $2.1 billion at the current stock price. The primary reason for AMD's stock price to be so low is that people are afraid that AMD could go bankrupt - this is a valid fear. If, on the other hand, AMD were to get bought out, it would probably be well north of $5b, if not $7-8b, due to the *fear of bankruptcy* going away. Also, I don't think Abu Dhabhi would give up their shares for a sale of AMD at < $5b anyway.
 

jpiniero

Lifer
Oct 1, 2010
16,392
6,866
136
AMD has 777 million shares outstanding, and holds a market cap of right around $2.1 billion at the current stock price. The primary reason for AMD's stock price to be so low is that people are afraid that AMD could go bankrupt - this is a valid fear. If, on the other hand, AMD were to get bought out, it would probably be well north of $5b, if not $7-8b, due to the *fear of bankruptcy* going away. Also, I don't think Abu Dhabhi would give up their shares for a sale of AMD at < $5b anyway.

AMD's stock is basically worthless. Bond Holders are going to own it eventually. If Mubduala sells now they might be able to get something on the side like a cash infusion to GloFo. If they wait, both might go belly up.
 

Tsavo

Platinum Member
Sep 29, 2009
2,645
37
91
It doesn't matter what is in the contract, if AMD is bought out and Intel tries to terminate the x86 agreement they are instantly going to be on the hot seat with regulators. And really there is NO reason for Intel to insist on terminating x86 rights unless they are not confident in their ability to compete.

Intel isn't going to allow a foreign company to have access to its patents, and I'm certain US government would back them on this...especially if the buyer were to be Samsung.
 

metalliax

Member
Jan 20, 2014
119
2
81
AMD's stock is basically worthless. Bond Holders are going to own it eventually. If Mubduala sells now they might be able to get something on the side like a cash infusion to GloFo. If they wait, both might go belly up.

The only way AMD's stock ends up worthless and Mubadala look for a way out is if AMD's upcoming Carrizo and 3XX GPU releases are crap and next year's releases are also crap.

If Carrizo is close to as good as AMD has previewed, it will do well . If 3XX GPUs are also close to rumored performance, they should do well also. If these 2 things both happen, you'll see AMD at $6-8/share by end of year. If only one of these 2 things happen, you'll see $3-6/share by end of year. If both flop, you'll continue to see $2-3 doldrums over the next 12 months while people wait and hope for 14nm K12/Zen/GCN products. If these then fail to deliver, then you will see AMD shut their doors and get pawned off.
 

el etro

Golden Member
Jul 21, 2013
1,584
14
81
I don't see an end or a buyout of AMD at the end, but surely i know what will happen otherwise if AMD goes bankrupt: Parts of the enterprise will be sold. Both CPU and GPU patents and development teams can be absorbed by players at the mobile market. This still not happened only because AMD market value and total assets are too huge to any player in the market risk to buy the company.

And personally i don't think Samsung will have a good financial return if they buy AMD's IP and facilities. This is simply a too huge buy to the buyer get sure if was/will be a good deal or not.
 
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jpiniero

Lifer
Oct 1, 2010
16,392
6,866
136
The only way AMD's stock ends up worthless and Mubadala look for a way out is if AMD's upcoming Carrizo and 3XX GPU releases are crap and next year's releases are also crap.

Even in good times the GPU business has always been about breakeven. That's still better than the CPU business is doing though. Even if Carrizo turns out to be a decent product they still have to deal with the reality that consumer PC sales are still slumping plus Bay Trail now dominates what's left of it since Intel is selling it for basically nothing.
 

destrekor

Lifer
Nov 18, 2005
28,799
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Even in good times the GPU business has always been about breakeven. That's still better than the CPU business is doing though. Even if Carrizo turns out to be a decent product they still have to deal with the reality that consumer PC sales are still slumping plus Bay Trail now dominates what's left of it since Intel is selling it for basically nothing.

AMD really needs the Zen architecture to be a big hit. Sadly it's still a ways off, which is really leaving their performance lineup very long in the tooth, considering it really didn't put up much competition when it was new.

AMD has been in need of a completely new architecture that bucked the current trends they were working with. Intel had it's field day when it had the Pentium M, basically a shrink of the Pentium 3, which heavily influenced the Core architecture. They went on a tear with all of that, and Nehalem was just as much of a major step from the Core era, and the retooling of Nehalem into Sandy Bridge was phenomenal. Since then, Intel hasn't really really gone back to square one to really make the next big step, because they don't have to. They are reiterating and improving, but they haven't provided a significant leap since Sandy Bridge.

It has been said that Zen is such an example of a drastic revisit in their microarchitecture design, and is also a return to greater threading performance as opposed to leaning on weaker but more numerous cores.

If they can take a page out of Intel's playbook, look back to previous champions like K8 and reincorporate what worked so well there but of course improved with today's knowledge and technology, they could really have a hit on their hands.

I remember it was always hard for me to "switch camps" at different times: first to AMD during the K8 craze and enjoying overclocking and ultimately buying into Athlon; and then finding it a little hard to accept that Core2 was far and away better than anything AMD was offering but ultimately getting into a C2D to overclock. I've stuck to "the Intel camp" since then, never finding the AMD performance to ever be worthwhile compared to what I could get and afford with Intel. Granted, I have only made one jump since that C2D, to a 2600K, and am looking to hold onto this build until Skylake. And really, Skylake is just to get the latest technology I have been missing out on, I find the Z68 long in the tooth, not my CPU (especially OC'd). Performance charts still prove that to be true. But damn, it is now becoming time for PCIe 3.0, and the likes of native m.2 PCIe SSD support and SATA-Express would be quite handy.

My long-winded point, Intel is now simply cashing in on simply being able to get people to upgrade based on new technologies and ports (USB 3.1 Type C is freaking outstanding ), barely doing more than iterating on past CPU architectures.

If AMD can not only do a complete architecture overhaul from the ground up, but also succeed in making it a market contender, we all win, we all win very handsomely.

On the GPU front, I don't expect the R9 300 series to ultimately shake things up too much, but if it does compete fairly squarely with Nvidia's Maxwell2 in both performance and power efficiency, that's one hell of a starting point. Even if that doesn't change their market share, if they are basically neck and neck with Nvidia again, that at least demonstrates that they can continue to push their architecture. Hopefully it does bring them some additional revenue, because more investment in the GPU division could provide enough of an R&D budget to not only push GCN, but ultimately incorporate what worked into a new architecture, because it is time for that. I think they're running up against the limits of what one architecture can truly accomplish with only minimal improvements (in the grand scheme of things).

A die shrink to 14nm obviously gives them more room to give one more mighty push, and I expect that AMD's next generation will compete squarely with Pascal. I'm fairly confident that Pascal will ultimately shape up to be more of a Tick than a Tock, mostly serving to be a die-shrink that is perhaps re-tooled and improved upon slightly but not a drastically different architecture design. The Maxwell architecture was ultimately designed for a 20nm node or smaller, but the node improvements for GPUs fell back with delays. If this new version of GCN matches or bests Maxwell, then the die-shrink from both companies should keep things mostly around that same toe-to-toe matchup. After that, however, I really hope AMD is pushing to move beyond GCN or so radically reinvent it that may as well be new.
 
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