Could Intel-Nvidia deal finally do in AMD?

Unlike Intel, AMD doesn't have the resources to buy its way into the mobile market

Last November, ARM co-founder Hermann Hauser predicted that Intel was doomed. The reason: The chip giant was floundering in the mobile space because it persisted and failed at building a viable chip for mobile that could compete with the dominant ARM model.

"People in the mobile phone architecture [business] do not buy microprocessors. So if you sell microprocessors you have the wrong model. They license them," Hauser told the Wall Street Journal.

Evidently, the powers that be at Intel have seen the wisdom in Hauser's words. The company has penned a staggering $1.5 billion multiyear cross-platform licensing deal with Nvidia, giving it access not only to Nvidia's portfolio of GPUs, but also its mobile processors, such as Tegra 2, which had a strong showing at this year's CES. In addition, the deal puts to rest all ongoing lawsuits between the two companies.

The deal should give Intel a much-needed push in the mobile market, a space in which it and Microsoft have struggled to make traction, perhaps held back by a PC-world mentality. In fact, combine the $1.5 billion Nvidia deal with Intel's $1.4 billion purchase of Infineon's wireless division last September, and you have a company that may very well be able to successfully make the transition to a mobile world -- if it can build something with all the shiny tools its added to its arsenal through hard cash instead of in-house innovation.

The Nvidia-Intel deal could, unfortunately, be the final nail in the coffin for AMD. Yes, observers have predicted AMD's imminent demise before, but now it appears that the company is really in dire straits. Like Intel, AMD seems to have spent too much time worrying about its standing in the PC chip market and hasn't brought any winning technologies to the mobile space. AMD has certainly demonstrated innovation for PC chips, including its newly minted Fusion APU (accelerated processing units) and, at CES, a new line of Phenom II processors. But mobile doesn't seem to be a priority for AMD.

Meanwhile, the deal with Nvidia also gives Intel access to the sort of graphic-intensive processing technologies that can help compete against the aforementioned AMD offerings.

Further, unlike Intel, AMD doesn't have a couple of billion dollars on hand to buy up potentially winning mobile technologies. The fact the AMD's CEO Dirk Meyer has just stepped down -- on the very same day that the Nvidia-Intel deal was announced -- also doesn't bode well for the chipmaker. Sure, new leadership brings a chance for a shakeup and a different course, but this time, it may be too late for AMD.

This article, "Could Intel-Nvidia deal finally do in AMD?," was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog.

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