Should Samsung Really Consider Buying AMD?

Not likely to happen

For college basketball fans, it's been a crazy weekend, and March as a whole. That's why it's called March Madness, and this time around, there were a number of notable upsets and surprises, like Michigan State advancing to the Final Four (I had them getting knocked out by Virgina in the second round). As wild of a ride it's been, it all pales in comparison to the rumor floating around that Samsung might be interested in acquired AMD.

The rumor originates from Hankooki, a South Korean newspaper that claims Samsung has the available cash to pull off such a transaction, and that it would be a win-win situation if it's able to close the deal. As the report tells it, Samsung's motivation is to use AMD's CPU and GPU technology to grow its business and help squash rival Qualcomm. It would also give Samsung a presence in the server market.

According to Hankooki, this isn't the first time Samsung's approached AMD about a buyout, either. It claims Samsung did so in 2007, a year before AMD spun off its manufacturing business and chip fabs to Globalfoundries.

Is this much ado about nothing? More often than not, major moves like this turn out to be false or fail to be consummated for one reason or another. As to whether Samsung should even be considering a buyout of AMD, that's a completely different discussion.

Ashraf Eassa, a technology specialist with the Motley Fool, argues several reasons why Samsung should back away from any such deal. The biggest one is that "AMD is not all that well" as it struggles to generate cash flow. Eassa's thought is that AMD doesn't bring enough to the table, and what little it does, Samsung could either build itself or acquire elsewhere for less money.

He also proposes that being a fab is a better idea for Samsung.

"Why should [Samsung] buy AMD an spend lots of money and effort trying to compete with Intel in PCs, when it could profit from building chips for a lot semiconductor companies?," Eassa proposes.

Do you agree with Eassa, or do you think Samsung could benefit from owning AMD's IP? Sound off in the comments section below!

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