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Intel will possibly acquire NVIDIA

Reuters speculates Intel is set to acquire NVIDIA. The speculation arose when NVIDIA’s shares rose 8% to $30.62 on the NASDAQ. Approximately 20 million shares were traded according to Reuters. Intel representatives declined to comment while NVIDIA representatives were unavailable. Bill Lefkowitz, options strategist, vFinance Investments believes Intel will make the announcement tonight.

This is still speculation at the moment as NVIDIA was deemed too expensive to purchase.The article claims:

Some observers said that they doubt Intel would buy NVIDIA because it's too expensive. The company has a stock market capitalization of about $10 billion, which means it would demand a far higher price than what AMD is paying for ATI.

Nevertheless, if the acquisition were to happen it would be interesting to see what Intel has in store for NVIDIA, as Intel holds the majority of the graphics market.  Intel’s primary competitor, AMD, previously acquired ATI Technologies -- NVIDIA’s primary competitor. The proposed AMD and ATI merger is nearing its final stages at the moment.

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By Trisped on 10/5/2006 12:11:41 PM , Rating: 2
It is not the same. AMD is not the one with a monopoly on PC CPUs. AMD also is not the one with the most motherboard chipset and GPU market share. Intel, on the other hand, does have a monoploy on the x86 processor. It has something like 80% of the motherboard chipsets and video processers in current desktops. NVidia also has a major piece of the GPU and motherboard chipset market.

Anti-Trust laws are specificly designed to limit these types of mergers, where the #1 and #2 provider in the fields join to become more powerful then all their compeditors combined.

It isn't going to happen. The most that will happen is that Intel will buy a piece of NVidia and use that to create a special deal where NVidia will recieve extra benifits over ATI. I am trying to think of an example, but am having a hard time. Does anyone have one?

By deeznuts on 10/5/2006 12:58:24 PM , Rating: 2
Umm, 80% is not a monopoly buddy. A monopoly is when one has no alternatives or choice. A monopoly in and of itself is not illegal. It's not desired, but not illegal.

It is anti-competitive practices, used by anyone, but especially monopolies and companies with greater share (i.e. Intel) that is undesirable.

If you have company A, and company B, and company A's products are so superior that nobody buys B's products and they disappear off of the business landscape, what's wrong with that? It's just competition.

If company A uses anti-competitive practices (bribes, illegal discounts etc.) then we have a problem.

But I agree with the rest of your post. I don't see Intel doing a full purchase but maybe a partial buyout then a strategic alliance.

By Viditor on 10/5/2006 11:41:19 PM , Rating: 2
1. A monopoly in US anti-trust law is the ability to create a "barrier to entry". The US Commerce Dept suggests in their guidelines that any company with greater than 50% of the market is a monopoly, though the actual definition is based on the barriers to entry. Even a company with 100% of the market is not a legal monopoly if they are not able to effect a new entrants pricing and market gain.

2. Currently, the marketshares for graphics in PCs are:
Intel = 40%
ATI = 27%
Nvidia = 20%
AMD+ATI remains at 27%
Intel+Nvidia = 60% which is a danger of monopoly

3. There is 0% chance of this merger being allowed by the DOJ because
a.) Nvidia is the largest supplier of chipsets for Intels only rival, which allow them to control the market again.
b.) As Intel is already in litigation for anti-trust specifically (in many countries), the DOJ tend to be far more conservative in their judgements
c.) The marketshare of Nvidia and Intel combined is well into the "danger zone" for monopolistic control

"I modded down, down, down, and the flames went higher." -- Sven Olsen
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