The rumour started when Kyle Bennett, chief editor of PC gaming enthusiasts site HardOCP, claimed the deal “is done” in a post on the HardOCP forums. “The licensing deal between AMD and Intel is signed and done for putting AMD GPU tech into Intel’s iGPU,” Bennett wrote.
Without any sources cited and no formal confirmation, the statement on its own appears unreliable. Bennett is well connected with the industry though. He has contacts with people at AMD and Intel and it’s unlikely he’d create a false claim and then post it on his website.
If correct, AMD and Intel will embark on a licensing deal the like of which has never been seen before. Intel will license AMD’s Radeon graphics technology and potentially include it in its own processors. This would be a monumental move for Intel as it would become dependent on its largest rival to supply a critical component of its processors.
While it seems risky, the arrangement could end up benefitting both companies. As it stands, Intel is regarded to have the highest-performing desktop processors, let down by weak graphics capabilities. By contrast, AMD’s raw processing power lags behind Intel’s. It offers superior built-in graphics though, making its chips ideal for budget machines for gamers and creatives.
If Intel licensed AMD’s graphics technology, it could give its processors the boost they need. In return, AMD would obtain substantial amounts of money, something it desperately needs to pay off debts and invest in further research and development.
The deal could create an Intel “super processor” with market-leading processing and graphics performance. This would seemingly destroy AMD’s remaining market share as there would be no reason to purchase its chips. The extra cash could help AMD to invest in further research and push its technology further though, allowing it to build more powerful components. In this way, the deal could be beneficial to competition in the industry.
At least one analyst expects AMD is taking a more cynical approach though. It could effectively give up on processing cores and concentrate on its successful Radeon graphics technology. By admitting defeat in processors, it could switch its attention to licensing tech to Intel. The royalties could be worth considerably more than the income from AMD’s low CPU market share.
“Is it better to make a royalty on 80 percent to 90 percent of the PC processor shipments or fight it out for the remaining 10 percent or 20 percent?” Kevin Krewell, an analyst with Tirias Research, wrote in a column on Forbes’ website.
There is another potential scenario that explains the deal. Intel needs patent protection on its graphics technology as an arrangement with NVIDIA expires next year. After settling a court case in 2011, Intel agreed to pay NVIDIA licensing fees of $1.5 billion to integrate graphics processors into its CPUs until 2017. It will soon need a new set of protections though.
Because the graphics industry is so dominated by Intel and AMD, it has to partner with one of the two if it’s to continue building GPUs. AMD may be more appealing as Intel now rivals NVIDIA in multiple industries. The two companies are both working in fields including machine learning and autonomous driving. Intel may have grown tired of sending money to its competitor and fuelling NVIDIA’s projects, leading it to license technology from AMD this time around.
