Microsoft Rumoured to be Interested in AMD

Microsoft is rumoured to be interested in acquiring Advanced Micro Devices (AMD), in an effort to revive its chip design operations and bolster its gaming arm by developing its own console chips. Microsoft is believed to have made an approach to AMD several months ago, though the results of their discussions are unclear.

The software company formed its own chip design business unit in 2006, with the main aim of developing chips for its game consoles. However, while the unit developed some chips for Microsoft’s hardware, it also used chips designed by AMD and Nvidia for the Xbox One and Zune players. According to estimates, Microsoft pays around $100 for every Xbox One system-on-chip to AMD and with life-to-date sales of the consoles at around 12.6 million units, this means that Microsoft has already paid AMD around $1.26 billion for Xbox One chips.

In March, Samsung was also linked to AMD when it was reported that the Korean company was considering making a bid for AMD (Intel, Samsung Rumoured to Be on Acquisition Trail). In the first quarter of the year, AMD’s net loss widened to $180 million from $20 million in Q1 of last year, while turnover for the quarter fell 26% year on year to $1 billion from $1.4 billion a year earlier.