Actually AMD is pretty cheap right now and if it was not for the pesky arrangement that prevents AMD's buyer getting its x86 technology then it would have been snapped up a while ago. But with, or without AMD, Samsung could still make a good fist of chipmaking if it put its mind to it. At the moment its chipmaking efforts are one of the better things on its balance sheet.
Its high-margin semiconductor business is more than making up for the shortfall in smartphones. Selling chips to rivals would be more lucrative if they were not spinning their own mobile business. The products it have are worth $11.7 billion this year, more than half the company's total.
Growing demand for chips and thin-film displays is probably the main reason that Samsung now expects operating profit to have reached $6.3 billion. After applying Samsung's 16 percent corporate tax rate, its chip division is likely to bring in net income of slightly less than $10 billion.
To put this figure into perspective Intel expects to earn $10.5 billion in this year. Samsung is also sitting on a $48 billion net cash pile. Samsung could see its handset and consumer electronics business as a sideline and just focus on bumping off Intel.
The two sides of such a war would be fascinating. Intel has its roots in the PC chip market which is still suffering while Samsung is based in the mobile chip market which is growing. Intel has had no luck crossing into the mobile market, but Samsung could start looking at server and PC chips.
AMD is still dying and unable to offer Intel any challenge but there is a large market for those PC users who do not want to buy Intel. What Samsung should have done is use its huge cash pile to buy its way into the PC market. It might have done so with the IBM tech which went to Lenovo. It is still not out of the running on that front. Lenovo might be happy to sell IBM tech to Samsung.
Another scenario is that it might try to buy an x86 licence from Intel. With AMD dying, Intel is sitting on a huge monopoly for PC technology. It is only a matter of time before an anti-trust suit appears. Intel might think it is worthwhile to get a reliable rival to stop those allegations taking place. Samsung would be a dangerous rival, but it would take a while before it got itself established. Intel might do well to consider it. Of course Samsung might buy AMD which could sweeten that deal for Intel.
Samsung could try adapting its mobile chip technology for the PC/server market – it has the money to do it. Then it has a huge job marketing itself as the new Intel.
It might just work.
