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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 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%
Therefore,
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


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