Buying MIPS would bring AMD nothing much, say analysts
4/17/2012 11:11 AM EDT
A rumor doing the rounds on a couple of tech sites claims Advanced Micro Devices Inc. (AMD) might have set its sights on buying MIPS Technologies Inc.
One of the pioneers of reduced instruction set computing (RISC) architecture, MIPS is deeply entrenched in the embedded space, and a premium player when it comes to controllers in embedded products. But so what?
“AMD’s been there and done that,” said analyst Nathan Brookwood from Insight 64, noting that the firm had acquired Alchemy (a MIPS licensee) back in 2002 and sold it to Raza in 2006. At best, said Brookwood, buying MIPS would represent nothing but a minor “distraction” for Intel’s smaller chip rival.
“The company has little if any traction in mobile, which is where AMD says it wants to focus,” he added. “MIPS has only been able to break into mobile with Ingenic and that is limited to low-tier OEMs in China,” said independent analyst Jim McGregor, pointing to the firm’s $99 tablet and cheap Android smartphone initiatives.
“I’m not sure buying MIPS would give AMD much in the way of IP either,” added analyst Jack Gold, noting that the firm had little to offer in the mobile space against the likes of Intel, Qualcomm, Nvidia or TI.
“It would give AMD big volumes, as MIPS controllers sell in the many millions, and probably profitably, but I don’t think that is what AMD needs at this point,” he said.
Sure, Gold argued, chip volume might be good when it comes to negotiating with foundries, but it’s near useless when it comes to competing long term in an increasingly mobile world.
“It doesn’t provide AMD with the RF side of the IP stream either, which all the major competitors now have,” he added.
On top of all that, Brookwood pointed out, MIPS’ business model (licensing IP) differs completely from the AMD business model (selling chips).
“The only thing MIPS would buy AMD is additional prowess in the server segment, which is a key focus for the new management,” said McGregor, though he pointed out that the firm was also struggling to move out of servers and the home.
“In fact, MIPS is under attack by ARM in the home,” he said.
The analyst verdict, then?
“All-in-all, I'd be very surprised if there was anything to this rumor,” said Brookwood, while Gold said he didn’t really see MIPS as a strategic acquisition for AMD.
Of the three analysts, McGregor was the most sympathetic to the rumored move. “I'm still not sure that this is the best strategy for the company overall, but it is better than the strategy AMD had six months ago,” he said.
- You can check out footage of MIPS' $99 tablet showcase at MWC below: