Intel Courting nVidia - Update

Intel Courting nVidia - Update

No news of the discussions regarding the Intel/nVidia merger have surfaced for a few days now and analysts are getting restless. An analyst for Merril Lynch claimed, We don't think there's a solid rationale for a deal and we don't think it's going to happen. Others are also now appearing to be sceptical of the chances of a merger quoting nVidia's expensive price and the possibility of antitrust issues as reasons.

What analysts are now suggesting is that nVidia needs the merger more than Intel as it will soon find itself the weaker side in the graphics market; AMD and Intel will have the majority of the motherboard market while ATI and Intel are expected to dominate the low end graphics market. This might suggest that other big electronics companies may be tempted to approach nVidia, with Samsung seeming to be the most likely candidate. The company's advanced graphics know-how, especially as DX10 is round the corner, may serve as a prestige temptation for future suitors.

Stay with MegaGames for more news on the Intel/nVidia merger.

Ever since the AMD takeover of ATI it has been clear that Intel would have to react in some way. It now seems that the reaction may be the most obvious one; the acquisition of nVidia.

The rumor that a deal is being discussed has gone from strength to strength in the past few days and today even managed to boost nVidia's share price. An Intel spokeswoman has declined to comment on market speculation while nVidia has yet to comment. These rumors are not new and had been around since July and the breaking story of the AMD/ATI deal but today has seen a powerful comeback for the Intel/nVidia romance.

There is speculation that Intel will make an acquisition announcement tonight, said Bill Lefkowitz, options strategist at brokerage firm vFinance Investments in New York. The resurfacing of the rumors however, does seem odd as nVidia is very expensive, about USD 10 billion, while Intel already has a thriving graphics section, something which AMD did not have before the ATI acquisition. There are, of course, issues of prestige and the need to be associated with a high-tech graphics company but this would seem more like tit for tat rather than a sound business move, unless Intel has some other plans which may need nVidia expertise, such as developing in-game physics, unified shader architecture etc.

It will be interesting to see how this story progresses, stay with MG for all the latest.