Is Dell in talks to buy chip maker AMD?

15 Feb 2011

Dell is rumoured to be pursuing a potential acquisition of microprocessor maker AMD. In what would turn the technology industry on its head, Dell would in effect become Intel’s biggest competitor.

However, analysts are playing down the likelihood of the acquisition. According to Bloomberg, analysts are saying there has been some “chatter” but dismiss the scenario as “a far-fetched possibility.”

The reason AMD is being tipped as a takeover target is down to the recent departure of CEO Dirk Meyer and the departure last week by the company’s chief operations officer Robert Rivet and its strategy head Marty Seyer.

CFO Thomas Seifert is interim CEO but has no plans to hold the role on a permanent basis.

Dell has a US$14bn war chest

The rumours began after a report appeared on Barron’s yesterday. The rumour sent AMD stock soaring 5pc.

Dell, which has missed six out of eight of its targeted earnings, despite its problems, has a war chest of US$14bn to hand. Acquiring a chip maker would give the firm untold advantages in terms of product development and strategy.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years